Weekly chart trend: Short. Main price points: 87.10, and 101.44. Looking for: Wave 5
The Usd/Jpy weekly chart is showing a bearish structure with an ending diagonal pattern in the red wave 5 position. The market came down from the wave 4 top to the current lows with a decline of a three wave structure in each leg overlapping waves 1 and 4. This is a typical structure of an ending diagonal pattern, shown on the chart below that can only occur in wave C, or wave 5, positions, and indicates a turning point.The turning point should follow as soon as wave 5, of the red wave 5 shown, is completed with a three wave pattern from the 101.44 area, if the black wave 4 highs hold. These lows may be found somewhere around the 161.8% extension of a black wave 4. The wave count will be invalidated if the 101.44 resistance area fails.
Daily chart trend: Short. Main price points: 91.74, and 98.88. Looking for: Wave A)
On the daily yen chart, prices fell down to the 91.74 support area with a blue wave A) leg, from where traders may already start to look for a pull-back in wave B) of wave (Y). Current actin signals for a much lower wave 5) price in the coming weeks, after the 91.74 support was recently broken. As such, we will be looking for a move down, near to the 87.10 support zone, if the wave (X) top and wave B) top at 98.88 holds.
4 Hour chart trend: Short. Main price points: 90.00, and 93.29. Looking for: Wave V
Usd/Jpy is trading lower while global equities are rising, further confirming the divergence seen in what was once noted as the carry trade. We have re-worked the wave count into a more extended structure, where wave V is searching for new down-side targets for a final push to complete the blue wave A) leg from daily chart. This wave A) could find the bottom somewhere around the 90.00 support zone, where the corrective bounce into a higher wave B) may follow. Currently we are watching two Fibonacci support levels, with the first one at the 261.8% extension of a red wave I, and the second at the 61.8% projection from wave (X) top, to red wave III lows, measured from the wave IV, 93.29 top.
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