In our last update regarding USDJPY: Easy & Difficult – Update! we stated that USDJPY needed to hold above 106.7 in order for the bullish scenario to be considered.
Recent price action, Fed’s decision to slow down on rate hikes, as well as Brexit induced uncertainties are the three main factors which have and will continue to weight on USDJPY and take it down to 102.00 and probably 100.00. The above chart is our count for the bigger picture. We consider the downtrend starting from the late 2015 as the (a) wave of the corrective a-b-c which should retrace most of the USDJPY rally of post 2011.
USDJPY Weekly 22-06-2016
On a shorter time frame with the focus in this week, it is highly probable that the sideways action from June 16th up to this day (June 22) is a corrective wave 4 which has stopped exactly at 50% retracement of wave 3. Given that blue (C) of wave 4 failed to close above 100% extension of blue (A), this might be the end of wave 4. We expect USDJPY to further drop and not breach 105.05 high established on June 21. From now on, wave 5 should start and even though it is premature establishing targets for the bottom of wave 5, a raw estimation gives us 102.00 as an important level while... Read More