USDJPY fell sharply after the FOMC voted to hike rate to 0.75%-1% in line with popular expectations. Technically, this pair was looking bearish before the Fed rate decisions. What should be expected in the coming days and weeks?. Will the dip continue?. We give you clues based on 16 March Post FOMC USDJPY Elliott wave analysis.
16 March, AtoZForex – In the last update, we suspected that the large double zigzag bullish correction was over. The pattern completed at a strong resistance level. Often time when price hits a strong reversal zone after completing a pattern, there is a reversal. The double zigzag pattern is a complex pattern that often takes much time to complete. The rate hike yesterday triggered the reversal and price dipped sharply. A quick look at the pattern again with the chart used in the last update.
We speculated that, if price breaks below the rising trendline in the chart below, there would be a high likelihood of price falling. We also stated that often time, after such a breakout, price pulls back before continuing downside. This gives sellers good price to sell for a big R/R. The chart below was used for intraday/swing traders
A breakout and pullback to 115 before price starts going down. The targets are 113.58 and 111.67. Price broke below slightly and pulled back. The rate hike came and we saw a fast dip which would have given 1:2 winners for smart traders. That’s past now. It’s important to look at what could happen next and find good levels to make new decisions. The chart below shows how we label the rate hike dip.
16 March Post FOMC USDJPY Elliott wave analysis: what next?
The chart above forecasts an impulsive dip to 111.66 support level. A corrective rally at 111.66 is likely . The next big opportunity is to wait for price to complete the correction that follows. Selling the rally would make sense. We will update you regularly as price movements progress.
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