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Home » Featured » USD/JPY – Possible Elliott Wave Count and Implication

USD/JPY – Possible Elliott Wave Count and Implication

Forex Technical Update

Previous: USD/JPY Breaks Short-term Trendline in Throwback Action (11/5)

USD/JPY 1H Chart 7:00AM EST 11/7/2012

USD/JPY 11/7/2012 1H chart

Correction: We noted earlier in the week that the USD/JPY was getting into a bit of consolidation after finding resistance at 80.66. So far we have seen some strong developments, such as a 61.8% retracement of the latest bull swing from 79.27 to 80.66. We also lost bullish momentum in the very short-term as the 1H RSI dipped kissed 30. In fact the RSI shows some bearish momentum building.

Corrective count: When we look at the structure of the correction, we see a possible completion of an A wave (impulse structure), and a B wave (corrective structure). If the US Dollar-Japanese Yen is indeed in a corrective mode, then we are likely developing wave C. Sure the swing down to 61.8% retracement at 79.80 could have been the C wave, but there are many other possibilities including a triangle (the 1H RSI should hold above 40 in this case), or a more complex impulse wave down.

Impulse count: When we look at the chart starting from the September low of 77.12, we see that the market could be in a bullish impulse wave development. So far, we have (1)(2)(3) with a nice wave 5-wave structure within wave (3). If we are indeed developing a wave (4), then it should not fall below wave (1), which is at 79.25. The 31.8% retracement of the Sept-Oct swing is at 79.31. For bullish momentum to hold for another upswing, the 4H RSI should stay above 40, as it has during the development of wave (3).

USD/JPY 4H Chart 7:10AM EST 11/7/2012

USD/JPY 11/7/2012 4H chart

Fan Yang CMT is the Chief Technical Strategist, trader, educator and a of the main contributors to FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.

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