USDJPY continued the rally last week before the U.S employment data caused a bearish end of the week. We look at the technical expectation this week based on 13 March USDJPY daily Elliott wave analysis. Will there be further rallies or price will be bearish this week?
13 March, AtoZForex – In the last update before last week NFP, we discussed about a triangle correction that was violated as price rallied above 114.8. We then forecast a larger double zigzag corrective pattern expecting price at 116-117. We try to re-analyze this and later discover that price is at a crossroad. Being held between two resistance boundaries, the bearish move could have an upper hand this week. The chart below was used in the last update.
The present rally could continue to 116-117 before getting exhausted. From the end of wave 5 in December 2016/January 2017, there has been real corrective moves with zigzag sub-waves
We expected the last a-b-c of leg of wave Y to extend to 116-117. This is still a possibility but wave c of the last leg may not extend to 100% Fibo-projection of wave a. Presently at 61.8% Fibo-projection of wave a and at a critical resistance level, wave c of Y will be complete if there is a breakout downside. The charts below shows this clearly
13 March USDJPY daily Elliott wave analysis: what next?
The chart below shows the resistance boundary 114.90-115.6 and how price reacted to it.
If the chart is taken back a little more, we will see price reacting to this zone. There is a high likelihood that another reversal will take place. This could be a huge reversal below 111.4. A good breakout would mean a bearish opportunity. If the bullish sub-correction is genuinely complete, we could see the bearish drive go as far as 107.35 in the next couple of months. Conversely, a strong bounce off the trendline could break above the boundary and price head toward 116-117 as earlier expected.
13 March USDJPY daily Elliott wave analysis: intraday opportunity
A good micro impulsive wave breakout of the trendline as shown below will be the first confirmation of the bearish resurgence.
A breakout opportunity or waiting for a pullback (for better entry price) could be really profitable as price embarks on a new bearish journey. It is very important to look at the patterns forming after the breakout for further confirmations. More updates will come during the week. Watch out.
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