Hello traders! Today we want to update our USDJPY chart from January 2021. When we mentioned and highlighted the bottom and bullish reversal with ending diagonal ( wedge ) pattern and weekly bullish engulfing candlestick formation. CLICK HERE
As you can see on the left, since then USDJPY is in massive and impulsive weekly rally within a five-wave cycle, where we are tracking final wave V. However, looking at the smaller time frame, in the 4-hour chart on the right. We can still see it trading in an extended wave V, which should be completed by a five-wave cycle of the lower degree.
That being said, seems like USDJPY has room for more upside. But currently it can be finishing wave (III) of V around EW channel resistance line, so be aware of a pullback in wave (IV) that can occur anytime soon.
Once USDJPY starts sharply falling back below EW channel support line. This is when we can start tracking a correction in wave (IV). Where ideal support would be around December 2016 highs and 118 area.
Elliott Wave Analysis: USDJPY Yearly Update by ew-forecast on TradingView.com