USDJPY turned back to trade above 111 handle last week after a strong break below it at 110.6. What should we expect next? The following 30 July USDCAD Elliott wave analysis has clues.
USDJPY could be set to continue above 111 in the early days of this week. From Elliott wave perspective, the price drop to 110.6 last week completed an intraday bearish impulse wave with the 5th wave finished as an ending diagonal pattern. In the last update, we expected a 3-wave corrective rally up to 112.2 before we would figure out what could happen next – if price would return upside or continue the bearish move. The chart below was used in the last update.
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.
30 July USDCAD Elliott wave analysis: what next?
After the fast rally to 111.20 last week, price completed an intraday corrective wave b before rallying toward 111.2 thereby completing an inverted head and shoulder pattern. At break above 111.20, price would have confirmed the end of wave a-b and even the inverted head and shoulder pattern (with 110.6 as the base). The ultimate target will be 112.2. If price stays below 111.20 and drops back to 110.6 and below, this forecast would be invalid thus leading to a move toward 110 handle. Stay tuned for the next update.
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