Sunday 27 January 2013

EURJPY, Sunday, January 27, 2013

Hi Traders,

First, just let you know that I will host a free trading webinar and presented by ChaseJonesFX, the stockbroker I recently started co-operating with.

To login to this week’s webinar please follow- or visit

PASSWORD = chasejonesfx 

Webinar's Discussion Points: setting up your charts to identify Elliott Waves, Pivot point and Candlesticks trade set ups. The webinar will last 1 hour. Please feel free to ask any questions during the webinar.

Secondly, many thanks to Vikram Singh - one of our active traders and member of Sydney Traders - with whom I recently discussed some application of the "Awesome Oscillator" to identify safer entry points within the Elliott Waves (see some comments below). 


To start I'd like to draw a parallel with another competitive devaluation of the YEN in history as it happened during the great depression under the Finance Minister Takahashi Korekiyo.

To bring Japan out of the Great Depression of 1929, he instituted dramatically expansionary monetary and fiscal policy, abandoning the gold standard in December 1931, and running deficits with considerable success before being assassinated in 1936 for his attempt to reduce the military expenditures.

Well, here we go again.

In Feb 2012 the BOJ started an action that brought the YEN almost 20% down against USD and, from July 2012, the YEN lost over 28% against the EUR.

Just bear in mind that this is just the beginning of the sequence of Elliott waves.


As you can see in the Monthly chart below the EURJPY started wave-1-up with some insane volatility. There's no candlestick reversal in sight yet. However, there seem to be a resistance in the area 123.34-124.38.

click the chart to enlarge and "esc" to exit

The weekly chart below shows that wave 3 (out of 5) retraced almost exactly 61.8% of the last downtrend. Level 123.3 is also the 38.2% retracement of the downtrend started in Aug 2008.

This coincidence forms a so called confluence (K) and it's the area where the retracement caused by the new wave 4 could start soon.  

click the chart to enlarge and "esc" to exit

Yet, in the daily chart below there's no Reversal Candlestick in sight. However there are 4 contact points in the channels - see the blue ellipses - meaning that we're almost there and there's the chance of a reversal and a breakout of the channel soon (downwards).

click the chart to enlarge and "esc" to exit

The 4-hour chart below demonstrates that, often, when the "Awesome Oscillator" indulge around zero we have a good buy signal as it happened with wave 2 and wave 4. 

Finally, there seem to be only 4 waves out of five in the 1-hour chart below, meaning that, when the correction (wave 4) is completed, a very last attempt upwards should occur (wave 5). 

No buy signal yet from the "Awesome Oscillator" as the little retracement wave 4 is not completed yet.

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