USDJPY Technical Analysis: Buying into the Long term bulls?


USDJPY has hit 114 handle today following a strong Dollar. As traders await further clues to determine whether price will advance further or make a bearish correction, what next?

Dollar-yen ended a bearish cycle in the last week of March around 104.5. Since the end of this bearish cycle, price has advanced fiercely, hugely influenced by a climbing Dollar price. The USD market indicators are shooting even higher. DJIA and S&P 500 are close to record highs. The FED expected rate hike last week also saw Dollar index resuming upside – hitting 95. In September, USDJPY gained about 300 Pips in a steady and consistent rally. With the rally so persistent, are there signs of price dropping at anytime soon? What are the new price levels to watch out for.

USDJPY/ Long term Important price Levels

On the long term, the two most important resistance levels are 118.60 (December 2016/January 2017 high) and 126 (year 2015 high). On the downside, the two most important support levels are 105 (February/march 2018 low) and 99 (year 2016 low).

USDJPY Long term Elliott wave analysis

A bullish impulse wave completed between 75.3 (October 2011) and 126 (May 2015) and was immediately followed by a corrective wave as expected. The first leg of the bearish correction moved between 126 and 99 (June 2016). The second leg is currently running. By projection, this might continue to 120-123. This means that, if this forecast is valid, the rally will continue to 2019. The long term direction looks bullish. What are the short term important levels.

USDJPY/ Short term Important price Levels

With price around the 114 handle, the next resistance levels are 114.5 and 115.5 on the short term. In fact 114.5-115.5 is an important zone where price might make a bearish correction because it lies at once a congestive zone. Downside, 113.2 (a immediate resistance broken upside) and 109.9 are the nearest support levels in case price falls.

USDJPY Short term Elliott wave analysis

From the long term degree, price is making a wave B of 2 rally. Wave B which is looking like a zigzag pattern is completing the last leg – expected to be a motive wave (impulse wave most probably). If this forecast is correct, USDJPY will advance far further. It seems the best way to catch up is to buy at the end of the each dips on the way up.

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