USD/JPY Elliott Wave Analysis

USD/JPY – 90.22

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

Despite falling to 88.14 (reached our indicated c leg target at 88.24) last week, as the greenback staged a strong rebound from there on cross-selling in yen, suggesting the c leg of wave B has possibly ended there and upside bias is seen for further gain towards 92.16, however, a daily close above there is needed to provide final confirmation and confirm wave C has commenced for eventual retest o 93.78.

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 ended at 93.78) and B leg of wave (2) has possibly ended at 88.14 and C leg is now in progress.

Looking ahead, a breach of resistance at 93.78 would indicate the rise from 84.82 low has resumed 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.

On the downside, expect pullback to be limited to 89.00 and bring such rise. Break of 88.14 support would risk stronger correction to 87.30/40 but reckon 86.93 (100% projection of 93.78 to 88.55 measuring from 92.16) would hold.

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