I pay attention to the Japanese Yen. I think it will be a good short because the BOJ will eventually have to choose between higher interest rates or a weaker currency. In my estimation, the latter will precede the former. The last couple times I've posted about it, the emphasis has been on a head and shoulders in the chart which largely came to fruition. However, as the exchange rate against the dollar has moved down (implying strength in the Yen), it has seemingly hit a resistance point at 78 and is now suggesting that the trend may start to move the other way (as in, you could initiate a short position). Below is a USD/JPY chart that goes back to roughly April 2011.
What I'm seeing is something that looks like a cup and handle formation. Given it's size, the target would be a move from the current 79.50 to at least 92. It is not yet fully formed, and if the Yen convincingly goes below 78, I will have to re-assess. But, while my diagnosis a couple months back was against any near-term short, I am now starting to believe that the tides may have shifted.
