USDJPY is returning above the 111 handle after a brief break below it. The following 26 July USDJPY Elliott wave analysis looks at what is expected next based on Elliott wave theory.
The dollar rally today has seen USDJPY rallied above the 111 handle. Yesterday, there was a break below as the bearish impulse wave continued. In the last update, we expected price bearish target at 110.2 after a significant breakout below 111. Price has now returned to the intraday support price zone after just 40 pips below it. The chart below was used in the last update.
Price will most likely break below 111 today or tomorrow. If this happens, the next price level is 110-110.20. This count will be valid once price breaks below 110.95. Alternatively, wave iv could end as a triangle pattern if price pull one more leg upside (below 111.40) before breaking downside. This forecast will be invalid if price hits above 111.5 before the bearish breakout.
26 July USDJPY Elliott wave analysis: what next?
It looks like wave v has ended with an ending diagonal pattern at 110.6 just 40 pips beneath the support zone. With price now returning upside, we might see a 3-wave bullish correction up to 112.2 before the next bearish move. An intraday trader might consider buying the next dip above 110.6 aiming 112-112.2 target. Stay tuned for the next update.
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