USD/JPY Elliott Wave Analysis

USD/JPY – 90.33

USD/JPY – Wave (1) of 2 has ended at 84.82 and wave (2) is unfolding

As indicated in our previous update, early break of 91.25 signals the first leg of upmove from 84.82 (tentatively a leg of wave (2)) has ended at 93.78 and b leg of this wave (2) is unfolding and reached our indicated downside target at 89.30 (50% Fibonacci retracement of the a leg from 84.82). Although dollar has recovered from 89.14, expect upside to be limited to 91.88 resistance and bring another decline later towards 88.24-32 (61.8% Fibonacci retracement and previous support), however, reckon chart level at 87.36 would contain weakness and bring c leg of wave (2) later.

Our latest preferred count is that, wave 1 ended at 87.10 followed by a 3-legged wave 2 at 101.45 and the wave 3 is unfolding with wave (1) of 3 sub-divided into i: 91.73, ii: 97.79, iii: 88.01, then wave iv at 92.33, therefore, the wave v of (1) has ended at 84.82 and wave (2) is now unfolding with a leg possibly ended at 93.78) and b leg of wave (2) should be limited to 87.36 and bring c leg of wave (2) later.

On the upside, only a daily close above resistance at 91.88 would suggest the fall from 93.78 has possibly ended, then gain to 92.50/60 would follow but breach of resistance at 93.78 is needed to indicate the rise from 84.82 is still in progress in c leg for headway to 95.00/10 (61.8% Fibonacci retracement of 101.45-84.82), however, reckon price would falter well below resistance at 97.79.

Our alternate count is that only wave (3) of 1 has ended at 87.10 and the rise from there to 101.45 is the wave (4) of 1 and the (5) of 1 has possibly ended at 84.82. In the event the greenback is able to close above 95.10 on a daily basis, this would add credence to this slightly more bullish count (only for the near term) and bring stronger correction in wave (2) of 3 towards 97.79.

Based on ActionForex.com Technical Outlook