Thursday, October 31, 2013

USDJPY: The Wave Structure Is Pointing Towards 99 And 100

USDJPY reversed nicely higher in this week, now already trading well above the upper trend line of a corrective channel connected from 99.00 swing high. This breakout is a confirmation for a change trend; from temporary bearish direction to bullish view. As such, we believe that corrective three wave decline in wave 2/B is complete at 96.92 and that prices are moving up in wave 3 or wave C. Both waves, C and 3 are motive waves which means that we expect a five wave rally from end of wave 2/B so pair is expected to revisit zone above 99, possibly even 100 psychological level. In the near-term however, we could see a pull-back to 97.90-98.10 region in wave (ii) before uptrend resumes.

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