USDJPY continues the bullish move that started late March this year after the completion of a long term corrective bearish wave structure. The following 16 May USDJPY Elliott wave analysis looks at USDJPY forecast based on Elliott wave theory.
USDJPY completed a long term bearish corrective pattern at 104.6. Since the pattern completed Dollar-Yen has rallied strongly. This came at a time when the dollar gained against other major currencies. But before the dollar rallied price itself was already giving bullish clues. In this analysis, we will look at the wave analysis from the long term weekly chart to the short term hourly chart. Let’s begin with the weekly chart.
16 May USDJPY Elliott wave analysis: Long term wave analysis
From late 2011 to mid 2015, USDJPY advanced to complete an impulse wave. According to Elliott wave theory, a 3-wave corrective dip should follow. Price dropped massively. The first drop from the end of the 5th wave was impulsive suggesting the first leg – wave (A) of the expected bearish correction. Wave (A) ended in October 1016 (lasted for more than a year) and price returned upside. The current rally might be a move to complete wave (B) which looks likely to go very close to the top of wave (5). Price is still bullish from the forecast above but it’s good to have idea of the long term outlook. Let’s go to the lower time frame to see how far the current rally has gone.
16 May USDJPY Elliott wave analysis: Short term wave analysis
The ending diagonal wave (v) of y of the corrective wave B signaled the beginning of the current rally. The move started in March. Ending diagonals are known to precede fast, big moves against the current direction. The rally from 104.62 looks impulsive at the moment as price climbs gradually with non-overlapping sub-waves. The impulsive rally is expected to continue to 113.8 (next resistance level) before price drops downside to 110 or below. Let’s see how price will play out in the coming days and weeks. Stay tuned for the next update.
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