USDJPY is taking a much deeper correction upside. Is price at the verge of dropping further? The following 13 June USDJPY Elliott wave analysis looks at the technical analysis of USDJPY based on Elliott wave theory.
USDJPY rallied above the 110 reversal level we looked at in the last update. Price broke above 110 and covered 50 Pips more upside. Unless price breaks above 111.4, the chance of more dip below 108 still exist. Price is making a 3-wave correction downside after the impulse wave rally from 104.6 to 111.4 seen in most of April/May. A 3-wave bearish corrective rally is expected to happen according to Elliott wave theory. The current rally is expected to be the wave b of the correction as explained in the last update where the chart below was used.
There is a reversal zone at 109.5-110. If there is a bearish signal around there, we might see price dropping fast to 107 to complete wave ii). Only a break above 111.4 would invalidate this forecast. Price could still rally above 109.5-110 especially if there is no bearish signal. If this happens, Price could still reverse at any price between the zone and 111.4.
Price bridged above the 109.5-110 reversal zone but has not broken above 111.4. We stated in the last update that price could still reverse at any price between 109.5/110 - 111.4. Price is now at 110.5. Can there still be a fast drop? The chart below shows the new update.
13 June USDJPY Elliott wave analysis ahead of the FOMC
The chart below shows the new forecast as we await the FOMC later today.
The bullish corrective wave b is completing a zigzag formed within a channel. We could see price getting to the roof of the channel at 111. If price bridges above 111, we may see it eventually break above 111.4 to invalidate this forecast. If price is contained below 111.4 and especially below the channel, we might see a fast drop that will break below the channel support line down to 107.5. Stay tuned for the next update.
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