The Path to USDJPY 175

USDJPY has moved out of a triangle pattern. If this move holds and establishes a bull trend, the next target is 125.

Upon reaching 125m USDJPY hits resistance. A break above that level would complete a well-formed inverse head-and-shoulders. That would have a target of 175.

A move of this magnitude would be ~60 percent advance in USD or ~40 percent devaluation of the yen.

Gold is confirming a "deflationary" interpretation here as it rallies along with USD, a break from it's very long-term correlation with JPY.

If gold moves through $1600 and DXY through 100 and both moves hold, the "fiat burns from the periphery to the core" scenario I've discussed here for many years is in play. The broad trade-weighted USD (currency weights: EUR 18.7 percent, CAD 18.5 percent, CNY 12.4 percent, MXN 11.3 percent, JPY 9.1 percent; total 70 percent) points to a 30 percent rally if its basing pattern completes with a bullish breakout.

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