USDJPY climbed to 125.28 yesterday, but the bulls could hold on to that momentum, which led to a decline as low as 123.78. The pair is now trading around 124.60. Let’s see what are we going to find, if we take a closer look at USDJPY’s recent behavior on a 15-minute chart.
As Elliott Wave analysts, we are always looking for the common 5-3 wave cycle. USDJPY seems to be showing just that. As the chart demonstrates, the decline from 125.28 to 123.78 could easily be counted as a five-wave impulse. In this respect, the following recovery should be the corresponding three-wave correction in the opposite direction. According to the Elliott Wave Principle, we should prepare for lower USDJPY rates, as long as the invalidation level at 125.30 holds.