We went long USD/JPY on Sept 22 on the dip down to 111.70 and moved the stop loss to 112.48 on October 30.
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.
The current price action in USD/JPY opens the door for a larger correction to around 112.00. The USD/JPY correction might not dig much deeper than our stop loss. However, the probabilities of the original trade have shifted more so to the downside and we will exit the party now with USD/JPY trading near 112.78 with just over 100 pips of profit.
USD/JPY Intraday Chart November 15, 2017
We have grown concerned because some other JPY cross pairs are exhibiting the potential for deeper corrections. For example, AUD/JPY reversed near the 61.8% Fibonacci expansion and has now broken below the support trend channel.
Additionally, GBP/JPY and EUR/JPY appear to have some deeper corrections coming as well. Therefore, what is the common thread between each of these markets? The Japanese Yen and increased probability of strength to come.
EURJPY appears poised for a wave (c) correction lower.
Therefore, we will close the USD/JPY trade at market near 112.78 and be content with the profit secured. Moving on to other opportunities in EUR, AUD, CAD, and GBP.
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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.
Other Elliott Wave forecasts by Jeremy:
GBP/USD Hanging Over the Edge of a Cliff
Short term EURUSD Pattern Hints at Bounce to 1.17.
USD/CAD dives 200 pips, will it continue?
AUD/USD searching for a bottom.
NZDUSD Elliott Wave Analysis: Temporary Relief Rallies
Jeremy’s favorite Elliott Wave Resources:
Elliott Wave Patterns: What is a Zigzag?
3 Elliott Wave Flat Patterns to Know and Understand
Learn more about the Elliott Wave patterns by receiving our beginner and advanced Elliott Wave guides.
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Elliott Wave Impulse Patterns
Elliott Wave Zigzag Patterns
Elliott Wave Flat Patterns
Elliott Wave Triangle Patterns
Elliott Wave Diagonal Patterns
Starting Your Elliott Wave Counting
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