USDJPY Elliott waves analysis – 27-06-2016

Wave count for USDJPY

USDJPY is in a very interesting situation. Lets start from the Monthly chart of USDJPY.

USDJPY recorded the all time low of 75.565 back in November 2011. All time data shows that USDJPY price was at approx. 360.00 way back in 1950’s. That information does not have any value in terms of current market price. But the structure or wave count of the decline does.

USDJPY all time monthly chart

USDJPY all time monthly data waves analysis
Image credit: fxtop.com

The count of the decline is a 5 wave impulse in two of the higher degrees. So literally, its fresh start of count from the all time lowest low.

There is also a disadvantage in charts like these. When an impulse wave completes its course in the highest visible degree, one cannot differentiate whether the impulse is an A wave or a 1st wave of an even higher degree. Obviously the forecast of the next wave can differ in each case. But for trading purposes we have little concern of what will be the count of a wave, which could take decades to complete.

USDJPY monthly chart – closer look

usdjpy monthly chart elliott wave forecast 27-06-2016

This monthly chart at first glance a count of 5 is possible. But the question is, is it wave 1 or A of the higher degree. One could argue that it should be wave A, because its the obvious count after a 5-wave impulse. But remember the market has to complete a correction in the higher degree. So this could be wave 1 of a wave A of a higher-degree-abc-correction. Either way its a valid call for the moment, because both the waves (A and 1) are of motive nature comprising of 5 sub-divisive waves.

Zooming further into lower degrees revealed that its almost impossible to differentiate 5 waves within the bullish impulse with alteration between 2nd and 4th wave patterns. So this wave of Supercycle degree could be neither A nor 1, but W.

USDJPY weekly chart

usdjpy-w-elliott-waves-forecast-27-06-2016

Note: there is a correction to be made on the image. Please note that  a and b must shift to the 3 and 4 positions respectively. 4th wave is a very short correction as per the revised count. (a) at the top is now viewed as a W because abc structures can never be the structure of A or 1st wave.

USDJPY daily chart

usdjpy-d-elliott-waves-forecast-27-06-2016

Now all subdivisions fall into place with this count, hence this is our preferred count at the moment. The idea is to catch the next impulse. So at the moment, it seems that one can safely assume that wave y of the Cycle degree and wave x of Supercycle degree is complete.

At this point, it does not matter if the current price is presumed end of wave x, b or 2 of the Supercycle (marked letters within brackets.) Because all possibilities expect the same results in the end – a bullish impulse.

So according to the wave analysis of USDJPY, technically one can expect for the prices to reach the highs of June 2015, in a fairly shorter span of time than it took to reach the current price.

 

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