If I told you two weeks ago when EUR/JPY was trading at 148.00 that we could do analysis to predict the top of a 14-month, 2000-pip move bull market in EUR/JPY to within 2 pips, would you believe me? I wouldn't believe it either. But we did. We have been watching this huge weekly measured move in EUR/JPY since last Tuesday that originated down at 130.62 mid-way through 2005. Projecting the distance of leg A-B up from point C to predict finishing point D yields 150.06, at trendline resistance. Okay, so we're casually observing this level for resistance, because most of the foreign exchange media is focused on this level as the dollar pairs are chopping around.

Pushing down to the 180-minute chart we see another possible 2-leg measured move, contained within the larger, weekly measured move scheduled to end at 150.07.  So now we have 150.06 as projected resistance, 150.07 as projected resistance, and guess what the high was last night? 150.06 was the high market last night and in reaction the market traded 100 points lower. This point is purely for educational purposes as we were not in this trade, but let's certainly keep an eye out for developments like this again.

For tonight, we need to watch that trendline support shown in gray at 149.00 for our next entry. Let's wait for a breakdown through support to a 148.60-70 low, followed then by a retracement to 149.00 to get short with stops at 149.30. The target for partials will be the previous 148.50 lows.

EUR/GPB held trendline support last night so there was no trade.

Todd Gordon is a Technical Currency Strategist and Fund Trader with GAIN Capital Group.

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