USDJPY rallied above 112 yesterday but has quickly dropped below it. What next? The following 2 August USDJPY Elliott wave analysis gives technical insights.
USDJPY had a bullish breakout this week to stay far above 111. The bullish run continued yesterday as price ran above 112 briefly. The run has been altered today with a dip to 111.50. In the last update, we expected this to happen. With the chart below, we expected the bullish correction to last till 111.88-112.2 before the next dip.
Price significantly broke above 111.20 to establish the expected bullish corrective move. We would be expecting the rally to last up to 111.88 or even 112.2 before price starts dropping again. Unless a sudden bearish move back to the head and shoulder zone, the rally should go a bit more.
2 August USDJPY Elliott wave analysis: what next?
Price hit the reversal zone we marked and turned downside fast. We have started counting from 111.2. A dip below 111.25-111.20 could be enough to confirm price’s commitment to the bears. If price breaks below 111.25, sellers can sell the next bounce. Alternatively, price could bounce from the current level back to the zone to invalidate our expectation. The early sign of this is a rally above 111.75. Stay tuned for the next update.
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