29 Jan 2015
ESH5 about to resume its bull trend, USD/JPY may benefit – BAML
FXStreet (Barcelona) - MacNeil Curry, CFA, CMT, Technical Strategist at Bank of America-Merrill Lynch, expects the long term trend in ESH5 to resume, which would benefit USD/JPY, with the pair breaking its short-term triangle formation and now targeting 119.74 levels.
Key Quotes
“For the past 6wks, ESH5 has been caught in a choppy and frustrating Triangle/contracting range. Now that pattern is poised to complete and the long term bull trend looks set to resume. A break of 2058.00 (triangle resistance) would complete the pattern, while a break of the Jan-09 high at 2062.00 would confirm a resumption of the long term bull trend.”
“Upside targets are seen to 2118/19 (long term channel resistance, which equates to 2125/2126 in CASH) and then 2136 (Triangle objective).”
“Below 1970.25 (Jan-15 low) invalidates the Triangle, while it would take a sustained break of the Dec-16 low at 1961.50 (1972.56 in cash) to negate the larger bullish view.”
“Such a breakout in the ESH5 should be very bullish $/¥ and bearish US Treasuries. Indeed, we have recommended going long $/¥ as it is completing its own, s/term Triangle formation, targeting 119.74, potentially as far as 120.36 before renewed stalling.”
“A break below 117.25 invalidates the setup.”
“Bigger picture, the long term uptrend remains incomplete for 124.16/124.59.”
Key Quotes
“For the past 6wks, ESH5 has been caught in a choppy and frustrating Triangle/contracting range. Now that pattern is poised to complete and the long term bull trend looks set to resume. A break of 2058.00 (triangle resistance) would complete the pattern, while a break of the Jan-09 high at 2062.00 would confirm a resumption of the long term bull trend.”
“Upside targets are seen to 2118/19 (long term channel resistance, which equates to 2125/2126 in CASH) and then 2136 (Triangle objective).”
“Below 1970.25 (Jan-15 low) invalidates the Triangle, while it would take a sustained break of the Dec-16 low at 1961.50 (1972.56 in cash) to negate the larger bullish view.”
“Such a breakout in the ESH5 should be very bullish $/¥ and bearish US Treasuries. Indeed, we have recommended going long $/¥ as it is completing its own, s/term Triangle formation, targeting 119.74, potentially as far as 120.36 before renewed stalling.”
“A break below 117.25 invalidates the setup.”
“Bigger picture, the long term uptrend remains incomplete for 124.16/124.59.”