USD-JPY daily 12-28-12

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

The wildly bullish talk regarding the USD/JPY currency pair appears to be well-founded from a supercycle point of view, but the moon-shot over the last 100 days has likely just about run out of rocket fuel.

The October 31 2011 all-time-low ended a 5-wave downward impulse that started all the way back in 1975, and finished with a terminal thrust from a 12-year-long wave-4 triangle (’95-’07). However, the initial up-move through March 15 2012 was very importantly a three-wave affair totalling 861.5 pips, and is therefore likely to be wave 1 (black) of a bullish leading diagonal. Wave 2 black to the downside was also a zigzag, traveling 704.9 pips ending September 13 2012. Now, wave 3 black has reached beyond the length that wave 1 black was, so the leading diagonal must be of the “expanding” variety, and not the more typical “contracting” type.

Since the diagonal is expanding, the imminent downside wave 4 must be longer than wave 2 was. If wave 3 black is complete, and all the proper subdivisions of a blue ABC appear to be in place, wave 4 must move more than 704.9 pips to the downside, to below 79.257 (if wave 3 black is complete) before wave 5 black ensues to the upside, eventually taking out the black 3 high.

The only way to count the move up from the September low as a wave 3 of an eventual non-overlapping upward impulse would be to call the movement up from October 31 2011 through March 14 2012 a standard 5-wave non-overlapping impulse, which is quite a stretch in my opinion. Admittedly, wave 1’s are often “unclean”, so if the up-move from Sept 13 2012 moves past 1.382 times the length wave 1 was, that will become the main count. This would require that the current rise continue relatively unabated to above 89.07 (1194 pips from the Sept 13 low).

Please join me for my “live” weekend webinar on Sunday, which includes weekend and mid-week updated ScreenShots, or just the EWP SreenShots (without webinar) at a lesser price.  Happy New Year!

Sid
http://elliottwavepre.wpengine.com