Medium term
Trade view / 20 December 2017 at 5:30 GMT

EURJPY rectangle holds key to next trend move

Managing Director / Technical Research Limited
New Zealand
Instrument: EURJPY
Price target: 137.40
Market price: 133.75

EURUSD found some support yesterday as Eurozone bond yields rose and the cross currency basis recovered from a five-year low. There is little data of importance on the Eurozone economic calendar heading into Xmas.
But there is still one potentially significant event for USDJPY, namely the Bank of Japan monetary policy statement on Thursday.

Analysts are not expecting any change to the yield curve control parameters at this time but with fewer bond purchases being needed to hold the curve steady over recent months, the statement could make some adjustment to the monetary base expansion target.

However that would be seen as a tapering of the QE program and the bank may not want to give such as signal yet, especially with inflation still missing in action. 
This will be my last posting for the year. Tomorrow I will be turning off the screens for two weeks to recharge my trading batteries. Back again early January.

Management and risk description

For the past three months EURJPY has been locked within 131.35–134.50 Rectangle corrective consolidation.

Individual “Commitment of Trader” report profiles indicate that the commercials have a near record short position in the EUR and an historically large long position in the Yen.

From an Elliott Wave perspective, a case can be made for an ultimate break in either direction and I would “respect” and trade any decisive break of this range accordingly (refer below).


Entry: For the remainder of this year only: EURJPY is seen as a Buy on any break above 134.60 and a Sell upon any break below 131.25

Stop: 60 point Stop, initially

Target: 137.40 on the Upside and 128.50 on the downside

Time horizon: Allow several weeks at least for target to be met
EURJPY Daily Chart (click to expand)
EURJPY daily chart
 EURJPY weekly chart (click to expand)
EURJPY Weekly chart
Source: both charts, ThomsonReuters  

— Edited by Adam Courtenay

Non-independent investment research disclaimer applies. Read more
A compiled overview of Trade Views provided on is found here
20 December
FXKhaos FXKhaos
Have a safe and enjoyable, well deserved break Max. Enjoyed and appreciated your postings throughout 2017. May 2018 be the best year yet, to you and your Loved Ones! Cheers!
20 December
Federigo Federigo
This comment has been redacted
20 December
Patto Patto
Who is this idiot Federigo posting spam on the site ?

I've enjoyed your trade recommendations and articles this year Max. Looking forward to your guidance in 2018.
20 December
Max McKegg Max McKegg
Thanks Patto, clearly someone abusing this forum and looking to promote himself. Pay no regard,
20 December
Logich Logich
@Max McKegg:
" that the commercials have a near record short position in the EUR and an historically large long position in the Yen" - Don´t you mean the opposite? Long Euro and short Yen.
20 December
Max McKegg Max McKegg
Correct, typo
20 December
Cat Cat
Max, thanks for your feedback on this cross. Enjoy your break.
20 December
Morten Olby Morten Olby
Merry Xmas, Max! Thanks for a lot of good recommendations.
20 December
jcsousa jcsousa
Enjoy the holidays Max. Wish you a nice 2018.
20 December
Treve Treve
Great Trade idea Max. Thanks for a superb year on TradngFloor. Looking forward to all your contributions In 2018.
21 December
hisham faour hisham faour
Took this trade yest. Might even add some more @ 135. Confirmation appreciated
21 December
marran marran
i was planning at adding at 135.0 as well
21 December
Tommy Champion Tommy Champion
This comment has been redacted


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