Wednesday, August 31, 2016

USD/JPY Formed a Double Bottom and Started Rising

My prognosis for the USD/JPY pair appears to be coming true.

After the pair formed a double bottom which is very obvious on the daily and weekly time frames, USD/JPY started rising and it reached the resistance trendline.

Of course, such a long-term trend isn’t easy to reverse, but if the pair does break out above the trendline this could be the first signal that a reversal is about to happen.

USD/JPY has been falling for 14 months, and I think that if there is a reversal we can expect a move to the upside towards 115.00 – 117.00 which will likely last another 12 – 14 months, perhaps even longer. The bullish move will be corrective, which I think is the hardest to trade out of the entire cycle of five impulse and three corrective waves of the Elliott Wave Theory. In my opinion, that means that intraday trading will be the most prudent approach.