USDJPY Time for a Minor Correction

Enda Glynn
USD/JPY Elliot Wave Analysis

My Bias: LONG
Wave Structure: rally in wave [C]
Long term wave count: wave [C] is underway, upside to above 136.00
Important risk events: JPY: n/a. USD: JOLTS Job Openings, FOMC Member Brainard Speaks.

On the 6th of June I published a piece called USDJPY on the verge of another big move.

At that time, the Elliott wave count was calling for another big rally in wave [iii] grey. The price stood at 109.40 at the time of publishing.
The price then rallied off those lows and has topped at 114.50 in this morning’s trade. That is a solid 500 point rally in one month.
The wave count is still suggesting that the price will continue higher as part of a larger wave structure. But at this point I am expecting a correction in a possible wave ‘iv’ brown. Given the current short term action, this could be the beginning of wave ‘iv’ brown.
As shown on the short term chart.
USD/JPY 30MIN Chart

Wave ‘iv’ must remain above 112.47 as this is the high of wave ‘i’ brown. The previous wave [i] grey lies at 114.36,
The price has just managed to break this level today, suggesting that the larger rally is intact.

Also the price has not touched the rising trend channel off the recent lows.
This suggests that any decline in wave ‘iv’ brown will be small and the price will rally again to meet that upper trendline soon. Wave ‘v’ brown may well achieve that initial goal.
USD/JPY 4H Chart

For the rest of the week:

  • Watch for wave ‘iv’ brown to get under way.
  • Wave ‘ii’ brown traced out an expanded flat, going by the Elliott wave guideline of alteration between corrective waves.
  • So wave ‘iv’ may well be another triangle.
USD/JPY Daily Chart

This post was originally published by Bullwaves

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