Despite yesterday’s rally, USDJPY is still more likely to continue downside until price action says otherwise. The following 4 April USDJPY Elliott wave analysis looks at where the next trade opportunity could lie in USDJPY.
04 April, AtoZForex – USDJPY started today on a bearish note after last week rally. Yesterday, price rallied a bit but today there was a bearish push in the early London session. Will this drop continue and for how long? Will the bulls take over? Are we going to see a fast bullish breakout soon or the bearish trend will continue? All these are possibilities. Let’s look at the most probable possibilities out of many.
Most traders, especially technical analysis traders, have heard this words many times – ‘the trend is your friend’. Of course, it’s easier to trade and make profit along the trend that against it. To trade along the trend, one must be able to define that trend. It’s very clear that USDJPY is in a downtrend. Elliott wave theory helps to define a trend more properly. It also helps to trade along it by identifying corrective patterns within a trend.
In the last update, the chart below was used to identify the bearish trend on USDJPY.
…. If the triangle pattern completes, price will be expected to take the final leg down before the bullish correction starts. The triangle has two more legs to complete. As you can see, having an anticipation of what price could do is very possible with Elliott wave theory and this is far beyond guess work. In the next update, we will follow the wave count and watch particularly the progress of the triangle pattern that has two more legs to complete…
The chart above shows that I was expecting a triangle pattern to complete wave 4 of the bearish trend. If this happens, we could have an opportunity to make profit along the trend. It’s very important to focus on the probable triangle pattern as the chart below shows.
4 April USDJPY Elliott wave analysis: what next?
Wave d of the proposed triangle pattern is not complete yet. There are still two more legs – wave d down and wave e up. Price could move in any other ways but we need to be patient to know what pattern wave 4 will come with or that the impulse wave is complete. In the coming days, there will be so much focus on how this evolves. I will update you. Please stay tuned.
Do you have other views in contrast to the ones listed or you want to compliment them further? let’s know by your comment below.
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