Friday, July 15, 2016

UsdJpy: Imminent Correction?

At the beginning of this trading week, we saw price making what looks like the first real attempt to embark on a major move against the large bearish correction which lasted more than a year.

This move is a clear impulse wave with a good impulsive terminating pattern at the 5th wave. A correction is highly imminent at the intra-day level especially if price is rejected by the resistance level though the medium-term outlook is bullish.


There is a great chance that the bullish move will continue to 112-115 where we will see if the long term correction has ended for a full-blown rally that will break above 126. That's still a long time. The purpose of this analysis is to dwell more on the intra-day opportunity.

In the last intra-day update, we used the chart below.

There was a 5-wave move upside and price seemed to be held below a falling trendline, but price rallied further as we see in the previous chart.

The new terminating pattern is shown by the chart below.

If price breaks below the support trendline, we could see a move to 102 before price resume the rally even stronger. This move may not pose a good R/R because it's expected to be a corrective move.

If price rather rallies further and breaks above 106.3, then something else could be forming and we will update you here.

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