Monday, October 17, 2016

USD/JPY Reached Strong Resistance and a Correction Will Likely Begin

It has been four days since the last time I spoke about this pair >>>  and the situation hasn’t changed considerably, which is why rather than repeating myself I will move directly onto my arguments about my current analysis.

The pair stopped right at the resistance trendline of the trend channel (in red) that formed between 99.538 (16th August 2016); 104.318 (2nd September 2016);  100.082 (27th September 2016) and 104.633 (13th October 2016).]

On the daily and the 4-hour time frames we can see a divergence on the RSI indicator between the last two highs.

On the 1-hour time frame there is a triangle which was broken to the downside.

In my last post about this pair I had pointed out that the move to the upside looks like five impulse Elliott Waves, which means that we can expect a correction.

Such a correction could take a while to develop, not to mention that a trend reversal rarely happens quickly. Usually the more long-term the trend, the slower it is to reverse.

Either way, we have to wait for the beginning of the American Session to find out whether this analysis is correct.