close icon

USDJPY Crashes After Textbook Elliott Wave Setup

It is not just stock market investors and oil bulls, who have been suffering lately. The holidays do not promise to be very happy for USDJPY bulls, as well. The pair fell to 110.81 on Thursday, revisiting levels last seen in early September.

The Fed rate hike, the stock market crash and the tensions between USA and China were among the most notable reasons the media used to explain the USDJPY slump with. Unfortunately, after-the-fact explanations are of little value to traders and investors, who need to stay ahead of the market, in order to take advantage of it.

Elliott Wave analysis is our solution to this problem. It is a pattern recognition technique, discovered by Ralph Nelson Elliott in the 1930s, which is still applicable today, more than 80 years later. For example, several hours prior to the Fed’s rate hike on Wednesday, December 19th, we sent the following chart of USDJPY to subscribers.
USDJPY tumbles in Elliott Wave manner
This chart was accompanied by this paragraph: “USDJPY’s decline from 113.71 can be expected to evolve into a five-wave impulse. A new low, followed by a three-wave recovery to roughly 112.60 can expected before the downtrend resumes.

That was all. No politics, no economics and no news interpretations. Just the simple Elliott wave logic stating that a three-wave correction follows every impulse and then the larger trend resumes in the direction of the five-wave pattern. Since this was a 30-minute chart, it did not take too long for this setup to give results.
Elliott Wave chart reveals USDJPY selloff
USDJPY initially fell to 112.09 in wave “v”. Then, an a-b-c zigzag correction lifted the pair to 112.67 and completed the entire 5-3 wave cycle from 113.71. The stage was set for a plunge and the bears took advantage of the dollar’s vulnerability to drag it down to 110.81 versus the Japanese yen on December 20th.

The pair closed at 111.22 on Friday. We can guarantee you that whatever it does in the future, the financial media will find a way to explain it with a piece of news, an event or a statement by a public figure. But unless traders learn how to turn back time, there is no way to extract anything from it. With the help of the Elliott Wave principle, on the other hand, they do stand a chance.

What will USDJPY bring next? That is the subject of discussion in our latest premium analysis! Order and receive TODAY!

Stay informed with our newsletter

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

Privacy policy
You may also like:

USDCAD Rises in Predictable Elliott Wave Manner

USDCAD rose significantly this past week, climbing from 1.2512 at the open to as high as 1.2949 Friday. The surge can be attributed to the slide in crude oil prices. Oil and USDCAD are known to have an inverse correlation due to the heavy reliance of the Canada’s economy on the commodity. And while the…

Read More »

Two Months Ahead of the 400-Pip Slide in EURUSD

Economic and fiscal steps taken to help the global economy rebound from the COVID-19 crisis are still in effect in both U.S. and EU. The amount of stimulus by the Fed far eclipsed the measures taken by the ECB. Direct unemployment payments are even creating a labor shortage. Many people prefer to rely on government…

Read More »

Elliott Wave Support Can Send USDZAR 15% Higher

It’s been a bad year for USDZAR bulls. The pair has been declining ever since it reached a high of 19.34 in early-April 2020. As of this writing, it is barely holding above 14.30, down 26% in a little over twelve months. Does this mean now is a good time to join the bears? We…

Read More »

Ahead of EURUSD ‘s Disappointing Start to 2021

Overall, 2020 was a good year for EURUSD bulls. Despite the March crash during the coronavirus-related volatility, the pair ended the year up almost 9%. With more stimulus already in the pipeline at the start of 2021, it made sense to expect further devaluation of the dollar against the Euro. Alas, common sense doesn’t always…

Read More »

USDJPY Gains 450 Pips and Counting in Two Months

2020 wasn’t a good year for USDJPY bulls. Starting from 108.63 in January, the pair closed at 103.32 on December 31st, down 4.9% in twelve months. But what the dollar lost against the yen in the entire 2020 it is now close to recouping in less than three months. USDJPY is approaching 108.50 as of…

Read More »

USDTRY Drop Accelerates as Elliott Wave Predicted

The Turkish Lira hit its highest level against the U.S. dollar in six months. The country economic and legal reforms announced last year coupled with tighter monetary policy appear to be giving the desired effect. USDTRY is down 19.3% from its November 2020 high after being in an uptrend since mid-2008. Most analyst, however, are…

Read More »

EURUSD Surges 570 Pips After Fibonacci Encounter

EURUSD is trading at levels last seen in April 2018, when it was on its way down to 1.0636 by March 2020. The pair is now approaching 1.2200, up 14.5% since the COVID-19 selloff nine months ago. But trends don’t move in a straight line. Two months ago, we showed you how Elliott Wave analysis…

Read More »

More analyses