We went long USD/JPY on Sept 22 on the dip down to 111.70 and moved the stop loss to 112.25 on October 20. Now that USD/JPY and its price action has developed further, we are going to squeeze the stop loss higher a little more as the pattern isn’t taking off to the upside like we anticipated. This is a subtle clue that a wash out lower may be on the horizon.

Therefore, we are going to bump the stop loss tighter to the proposed wave ‘i’ high of 112.48. Up to this point, USD/JPY has held above our defined support levels. We will continue to hold the long open if USD/JPY remains above 112.48.

The rest of the trading plan remains the same. Our first target to the upside is 115.50. At that point, we will close 1/3 of the position.

USD/JPY Elliott Wave Picture October 30, 2017

USD/JPY Stalls But Holds Above Support

We continue to monitor the relationship between USD/JPY and Nikkei 225. However, if USD/JPY is unable to follow through on this week’s strength, then we will be happy to exit the full position at 112.48.

IG Client Sentiment is neutral. The sentiment reading is currently near parity this week. Now, with a reading of -1.01, we would like to see a material move above +1.10 or below -1.10 to use this as a part of the analysis. Follow the live sentiment reading here.

In our previous analyst pick, we mentioned how GBP/JPY is a market to watch for clues on USD/JPY. The highlighted rectangle below appears to be a bearish impulse taking shape. If so, then it suggests pressure may weigh GBP/JPY and pull USD/JPY lower.

GBP/JPY Technical Analysis October 30, 2017

USD/JPY Stalls But Holds Above Support

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---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.

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