Elliott Wave Analysis: USDJPY and USD Index
USDJPY is in a strong bullish mode for the last few months so recent pullback down to 115.00 was just a temporary pause within an uptrend. We see this bearish activity as corrective wave 4, that seems to have ideally unfolded as a flat correction. Recent intraday bounce from the 161.8 Fibonacci ratio indicates that the correction in wave 4 is completed, and that more upside may follow in days ahead. That said a five wave move higher from current levels and a breach above the 118.57 level would indicate more gains to follow.
USD index was still trading sideways at the end of the previous weeks, away from 103.64 level where a top for wave 3) was found. As such price seem to have been dealing with an expanding flat correction, that could be as of recent bounce completed. As such more upside could now follow in sessions ahead for the USD Index. A five-wave development higher from current levels would indicate bigger wave 5) in progress.
Invalidation level is at 101.29 level- if it holds we are looking higher.
USD Index, 4H
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