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  • S&P 500 contending with its proverbial ‘line in the sand’ as bulls and bears battle for directional control. How we close/trade around the 50-day moving average could serve as a noteworthy bellwether for risk trends headed into next week. I remain cautious below ~4,480. $SPX $ES
  • USD/JPY trades to a fresh monthly (110.57) amid the pickup in longer-dated US Treasury yields, and the exchange rate may stage a larger advance over the coming days. Get your market update from @DavidJSong here:
  • US yields continue to climb, with the 10-year Treasury yield trading above 1.45% $ZN $ZB
  • $USDJPY bull thesis appears quite constructive. Technicals show topside breakout above trend resistance following a period of consolidation. Bond yields providing the fundamental catalyst. Eyes on Aug/YTD highs. A broad-based deterioration in market sentiment poses downside risk.
  • WTI posting another session of strong gains, currently flirting with the 74 handle $CL #Oil #OOTT
  • The New Zealand Dollar’s bullish breakout attempt in early-September was rebuffed. Price action at the end of the month is telling a different story. Get your market update from @CVecchioFX here:
  • So much for that Evergrande recovery. Shares of the troubled Chinese property developer are down approximately -12% today following yesterday's impressive rally (biggest in a year)
  • Retail trading platform Robinhood announces hire of new Chief Compliance Officer amid regulatory scrutiny
  • There is a ridiculous number of scheduled Fed speeches on the docket next week. Powell specifically will be speaking multiple times including at an ECB hosted forum on central banking (which also has a panel with Fed, ECB, BOE and BOJ heads)
  • USD Ascending Triangle, Bullish for Q4 - #DXY chart on @TradingView
USD/JPY Trend: Is This a Long Term Bottom?

USD/JPY Trend: Is This a Long Term Bottom?

Jeremy Wagner, CEWA-M, Head of Education

On Friday, we wrote how it appears USDJPY and its advance may kick off a new uptrend. Now that price action has matured some more, confirmation is building that a longer term bottom may have formed for USD/JPY.

In addition to the impulse move to start a new trend, we have a brief correction and partial retracement to that trend on September 14. This is a 5-3 wave sequence that we commonly use to start counting with Elliott Wave.

The next big obstacle in the path of USD/JPY is the resistance trend line covering the January and July 2017 highs. This resistance line is crossing near 112.80. It is possible that prices may react lower near here. If USD/JPY does correct a bit, we will look to initiate a long position on the dip near 111.70.

For this wave picture to remain as labeled, USD/JPY will need to hold above 111.09. If USDJPY is successful in breaking above 112.80, then the next levels of resistance are 114.50, 115.50, and 118.67.

We think this move higher has the potential to test these resistance levels and possibly even higher ones including new highs above 126.

Bottom line, we are looking to enter long on a 112.80 break higher or on a dip to 111.70. The key level and initial risk can be set at 111.09. Our initial target level is 115.50 where we will exit 1/3 of the position. We will manually trail the remaining position while targeting higher levels.

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USD/JPY Start of New Uptrend?

USD/JPY Trend: Is This a Long Term Bottom?

---Written by Jeremy Wagner, CEWA-M

Jeremy is a Certified Elliott Wave analyst with a Master’s designation. This report is intended to illustrate how Elliott Wave Theory can be used to identify potential patterns of trading opportunities.

For further study on Elliott Wave, watch this on demand webinar recording on “Starting Your Elliott Wave Counting” where Jeremy uses the 5-3 pattern similar to the one noted above as a way to starting counts using EW. [Registration required]

Recent Elliott Wave articles by Jeremy:

GBP/USD Approaches Important Long Term Price Zone

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Gold Prices Dive 3 out of 4 Days

Follow on twitter @JWagnerFXTrader .

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.