At the start of last week USDJPY was trading slightly above the 100.00 mark after falling from as high as 107.49 in mid-July. Usually, staying with the trend is a profitable approach, so basically, joining the bears would have made sense to most analysts. Usually, however, does not mean always, because no trend lasts forever. Traders have to be able to recognize when the trend is likely to end and prepare for the upcoming reversal. The Elliott Wave Principle can help them with the task. It is a technical forecasting method, based on pattern recognition. Our premium clients received the following analysis of USDJPY on Monday, August 22nd.(some of the marks have been removed for this chart)
Thanks to Elliott Wave analysis, we decided it was time for the bears to take a rest and instead of relying on the declining trend line, which has been applying pressure on USDJPY for a month, we were expecting the bulls to break it and take the pair much higher. A week later today, the rate just climbed to 102.38.
Elliott Wave analysis’ value can be seen in many different aspects, but reversal prediction is the field where it excels. When combined with some conventional technical tools, such as the Relative Strength Index, for example, the results can be pretty impressive. Think about that the next time you draw a trend line on a price chart.
What to expect from now on? What is the bigger picture saying? Is USDJPY going to continue even higher or the resistance near 102.40 would turn out to be too strong for the bulls to breach? Prepare yourself for whatever is coming. Order your Elliott Wave analysis due out every Monday at our Premium Forecasts section. Stay ahead of the news in any market with the Elliott Wave principle.
