On fading the EURJPY

Sean on FXWW said:

JPY starting to feel a bit overstretched

Now I’ll be the first to admit that I’ve thought this on many occasions and been wrong but USD/JPY certainly has a slightly tired feel to it. EUR/JPY is also approaching a big number at 130.00 and perhaps that combined with 100.00 in USD/JPY might be enough to encourage some profit taking?

I’m still going to wait until Europe opens and will sell another failure at 99.65 in USD/JPY

My question is: what is the incentive to keep buying at the current level? Then again, I ask myself that at 1.2250 and look what happened next.

We’ve travelled 10 big figures in 3 days, something that normally requires 3 months. So foreseeably top pickers and profit takers in action now, which (I think) should lead to a slow grind down or at least consolidation in the interim? Clearly, every healthy trend needs some form of retracement – the tricky bit is timing and level…

I’m not game enough to fade JPY yet, mainly because I don't have a feel for the yen - never really traded it much. Having said that, I think I’d rather wait for support to build for the next leg up.

UBS:

Any setback in EURJPY will be limited in time and extent, so look to get long on a correction to 125.15, targeting 132.00 with a stop at 122.50.