close icon

Japanese Yen Refuses to be the Dollar’s Latest Victim

Last week, when most major currencies like the euro, the Canadian dollar and the British pound (not to mention the Turkish lira) fell against the U.S. dollar, one currency managed not only to hold its ground, but to actually gain some against the greenback. The Japanese yen ‘s rise dragged the USDJPY pair down to an intraday low of 110.51 on Friday, August 10th.

Just ten days earlier, on August 1st, USDJPY was trading above 112.10 and it looked like the yen was going to be the U.S. dollar’s latest victim. Some of the things other analysts use to explain the Japanese yen ‘s recent strength include Japan’s GDP data, US inflation data, interest rates speculation, trade war concerns and, of course, Turkey’s currency crisis. Our explanation is a little different and a lot simpler. It involves the Elliott Wave Principle and the chart below, which we sent to subscribers on Wednesday, August 1st. (some marks have been removed for this article)
Japanese yen Elliott Wave prediction
Ten days ago, the 30-minute chart of USDJPY revealed a textbook five-wave impulse to the south from 113.18 to 110.59, followed by a three-wave recovery up to 112.15. According to the theory, the trend was supposed to resume in the direction of the impulsive pattern. Therefore, despite the three-wave recovery, the outlook was still negative towards a new low near 110.50, as long as the pair was trading below the starting point of the impulse at 113.18. The updates chart below shows what happened next.
Japanese yen to U.S. dollar Elliott Wave update
The dollar started falling against the Japanese yen almost immediately and never threatened 113.18. The recent decline doesn’t look exactly like an impulse, but the truth is traders cannot and don’t have to know what is going on all the time to make a good use of the Elliott Wave analysis. That is still a better strategy than trying to guess which of the numerous factors the market takes into account will trigger its next move and in what direction.

What will USDJPY bring next week? That is the subject of discussion in our next premium analysis due out on Sunday!



Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

GBPJPY: Bearish Reversal Expected Near 151.00

GBPJPY has been in recovery mode since it touched 139.90 on August 15th. On September 21st, the pair climbed to a multi-month high of 149.72, but fell to an intraday low of 146.51 yesterday. As of this writing, the Pound is hovering around 147.90 against the Japanese yen. The time is appropriate to apply the…

Read More »

USDCAD Unreliable Resistance Identified in Advance

After slightly exceeding 1.3000 on October 8th, USDCAD retreated to 1.2926 two days later. Given that the pair has been declining since the 1.3386 top registered in late-June, assuming the bears are returning was quite justified. In addition, there was a declining trend line, which had previously led to significant selloffs on two separate occasions.…

Read More »

USDJPY Gave Us a Road Map Three Months Ago

There is a reason why it is called “trading” and not “bottom/top picking”. The latter is literally impossible even with the best trading tools and techniques. Even the Elliott Wave Principle, which we consider to be the best method for price behavior analysis, cannot tell us the exact price level at which the market is…

Read More »

GBPCAD ‘s Rally Needs a Healthy Pullback

October is shaping up to be a good month for GBPCAD bulls. The pair dipped below 1.6600 on October 2nd, but quickly reversed to the upside for a recovery of over 470 pips so far. Earlier today the Pound climbed to as high as 1.7070 against the Canadian dollar. However, extrapolating the current trend into…

Read More »

A Week of Trend Reversals in the Forex Market

The Forex market was very interesting to observe last week. Major news like the Non-Farm Payrolls report in the U.S., the new trade deal between the USA, Canada and Mexico, and Bank of Japan’s determination to keep fighting deflation all contributed to an eventful five days in the world’s largest market. News and events is…

Read More »

USDMXN: Is the 18.50 Support Going to Hold?

It has been over two months since our last article about USDMXN. On July 27th, the Forex pair was trading slightly above 18.6150. The Elliott Wave Principle then suggested “a corrective rally to 19.50 – 20.00 is about to interrupt the downtrend in the near future.” The logic behind our optimism was simple: there was…

Read More »

EURUSD: When the Fed Supports the Elliott Wave View

Following a recovery of more than 500 pips in a little over a month, EURUSD suddenly crashed from 1.1815 to 1.1570 last week, erasing half of its recent progress in just a few days. The selloff came after the Fed raised its benchmark interest rate for the third time this year on Wednesday and promised…

Read More »

More analyses