In our last analysis of USDJPY we were expecting a rally to 102.30, followed by a strong decline. If you are interested in this pair, you should have noticed that it reached as high as 102.36 and then dropped-off to 100.80. This 150-pip sell-off is more than enough to consider this a successful forecast. However, we have to admit, that we were expecting the move to the south to be much bigger. Instead of this, USDJPY bottomed at 100.80 and is currently heading towards the 103 zone. So this is the right time to examine the situation once again.
The whole correction in wave 2 could have been over long ago at the end of wave A, but the Market decided to extend it into something, which so far looks like a perfect expanding flat. This is still a corrective pattern and since the larger trend is down, we are expecting prices to regain negative bias, once 103.20 is reached. This count would be invalidated, if USDJPY goes back to the top of wave (2)/B at 104.12.
Recommended reading: Expanding Flat and how to avoid its traps
Price patterns are not static. They develop and evolve. So anyone, who wants to be successful on the markets, has to learn to adapt to the continuously changing environment.
