Elliott Wave Analysis of the USD/JPY Currency Pair by Sid from ElliottWavePredictions.com.  Click on the charts twice to enlarge.

The Yen is showing several signs that the choppy, overlapping correction that started on March 21 may finally be complete as a green WXY combination.  MACD divergence is showing on 240, 60 and 15 minute charts, and the invalidation point for wave 4 pink (at 79.531) has not been reached.  There are some that are trying to count the downward movement since March 21 as 5 waves down, but I (and the Wave Principle) do not agree, because a triangle cannot appear alone in the wave 2 position . . (see the 180 minute chart).  When the wave 2 orange that appears to be  underway now is complete (see the 15 minute chart), strong upward action should ensue.  Also, with invalidation so very close by, this would constitute a textbook low risk, high reward trading setup.  At this early stage, my target for wave 5 pink is near the wave 3 pink top, at around 84.

If the upward movement that started in this pair on October 31st is to be convincing as a legitimate Elliott Wave upward impulse to kick off a new up-trend, price must stay above 79.531, and start rallying in an upward impulse within the next few hours.  The choppy upward action over the past few hours counts as a textbook small-degree bullish leading diagonal for wave 1 orange, so I’m encouraged that this pair is trying to kick off a pink wave 5 rally naturally . . in other words, without the assistance of BoJ intervention.  The next few hours are critical for this pair as far as I am concerned. If price moves below 79.531, I will be closing all of my long positions for a nice net profit, but will then have to wait (probably for many weeks) to see if the then overlapping up move from October 31 has just been another correction in a continued long-term downtrend, or if it is the start of a leading diagonal to the upside, which, the more I look at the upward structure so far since Oct 31, seems pretty unlikely.

Sid

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