USD/JPY Continues the Impulse Move to the Upside

The powerful bullish trend that broke above the resistance trendline (the red line) so effortlessly makes me rethink my expectation from yesterday that the impulse would end. It clearly continues developing, and the hammer bar and the divergence proved to be false signals. It happens sometimes, unfortunately.

The fact is that the USD/JPY pair is forming five impulse Elliott Waves and in the moment it’s developing its fifth wave, which means that the bullish trend that has already risen with 500 pips without a correction should end soon.

The fifth wave itself has overlapping highs and lows which means that it is forming an ending diagonal.

After saying all this I can conclude that the possible end of the impulse is around 105.50 – 105.60, after which we should expect a rather deep correction.