USDJPY just fell below the 111.00 mark. To be more precise, the pair slumped to 110.66. And while the majority would inevitably blame the Federal Reserve’s policy statement for the dollar’s weakness, the only thing traders actually care about is if the decline could have been predicted and how. The good news is that it could, by using the Elliott Wave Principle. And we can prove it by showing you the chart below, which we sent to our premium clients on March 14th.(some of the marks have been removed for this article)
As the chart shows, we recognized a triangle on the hourly chart of USDJPY. Triangles are corrective moves, interrupting the larger trend. In USDJPY’s case, the trend was still down. That is why, while the pair was at 113.80, we told our clients that “the invalidation level is 114.55. As long as it holds, the bears remain in charge and levels below 111.00 could be expected.” The next chart shows how the situation developed.
As visible, the pair remained indecisive for a while, before the bears finally returned for another leg to the south. However, the invalidation level at 114.55 was never threatened, so the only thing we had to do is wait. Three days later, on March 17th, USDJPY declined to 110.66, thus reaching the first target of 111.00 and proving the Wave principle deserves your trust.
What to expect from now on? What is the bigger picture saying? Is USDJPY going to continue even lower or the support near 110.70 would turn out to be too strong for the bears to breach? Prepare yourself for whatever is coming. Order your on demand Elliott Wave analysis now or pre-order the one due out next Monday at our Premium Forecasts section. Stay ahead of the news in any market with the Elliott Wave principle.
