Yen: Likely Higher High To Come
Trader Moe | Oct 15, 2015 12:46AM ET
The Yen Ended the Day with a Break of its Purple Triangle Top – Would Usually Go Still Higher
Yen futures ended the day with a break of the top of the purple triangle that’s been forming since late August.
Usually the yen would pull back into its blue rising megaphone here, then put in a higher high within that formation before retracing to the formation bottom (green scenario).
But the purple yen triangle is comprised of megaphones inside megaphones inside megaphones, and sometimes a triangle side will just give way for a move straight to one of the larger megaphone tops.
Oil just pulled off one of these melt-ups to a megaphone top after a triangle breakout. (Now it’s putting in the delayed mandatory retrace.)
If the yen is going to put in a continued melt-up like that, it would usually do it by redrawing the blue rising megaphone. That would mean a retrace to the current formation bottom, and then a breakout to a new high within the formation. Sometimes the final wave up would twine up the current formation bottom.
But the most likely scenario is the green one.
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