FXA - GBP/YEN Achieved Target Since Jan Above 127.85.

In the Feb 7th email on stg/yen (and the market near 122), affirmed the long position (bought on Jan 18th at 118.45) as the 5 wave rally from the Sept low at 116.90 continued to argue that the upside was not "complete", and targeted gains back to the Oct high at 127.85 and even above.  The market has indeed rallied since, today breaking above that 127.85 high and into next resistance at 128.20/45 (both the ceiling of the bullish channel since Sept and the a 50% retracement from the Apr high at 139.65, see daily chart below).  Though this is a "logical" area to form a top for at least a few weeks and potentially more (see longer term below), there are still no signs of even a shorter term top "pattern-wise" (5 waves down on shorter term chart, false break of key resistance, etc.).  So want to stay long but given the increasing risk, would switch to a very aggressive stop on a close below the multi-week bull trendline (currently at 125.75/90 and rising rapidly).  Support before there is seen at 126.55/70.

Longer term as discussed over the last few months, yen crosses (as well as $/yen) are seen the potential major movers in 2012 (upside).  In the case of stg/yen, the market is still forming a huge falling wedge over the last 3 years, a bottom pattern that resolves sharply higher, and suggests eventual gains toward 163.10 (Aug 2009, start of pattern) and even above.  However, there remains some risk for another month or 2 of broad basing.  Note that the last month of sharp gains has brought the market toward key resistance at the ceiling of the wedge (currently at 127.75/128.75, see weekly chart/2nd chart below) and also the nearer term, potential resistance (see shorter term above), and in turn suggests that if the market will indeed base for another month or 2, it may do so from here.  So for now, would maintain the longer term bullish bias that was put in place on Feb 7th at 122.00 and use the same exit as the shorter term (daily close below multi-week bull trendline) to switch to neutral, as it would increase the likelihood for a more extended period of wide basing.  

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