U.S. Dollar/Japanese Yen (USDJPY) Forex Elliott Wave Technical Analysis

By Peter Mathers of TradingLounge

Wednesday, August 21, 2024 1:35 PM EDT

Yen, Money, Wealth, Japanese Yen

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USDJPY Elliott Wave Analysis Trading Lounge Day Chart,

U.S. Dollar/Japanese Yen (USDJPY) Day Chart

USDJPY Elliott Wave Technical Analysis

Function: Trend
Mode: Impulsive
Structure: Navy blue wave 3
Position: Gray wave 1
Next Lower Degrees Direction: Navy blue wave 3 (initiated)
Details: Navy blue wave 2 appears completed, and navy blue wave 3 is currently active.
Wave Cancel Invalid Level: 149.495

The USD/JPY currency pair, when examined through Elliott Wave theory on the daily chart, is currently displaying a trend phase, marked by an impulsive movement mode. The primary wave structure identified is the navy blue wave 3, indicating a strong and ongoing downward trend.

At present, the market is positioned at gray wave 1, signifying the beginning of the first phase of a larger downward movement. This gray wave 1 is part of the broader navy blue wave 3, which has already commenced, suggesting continued bearish momentum in the market.

Prior to the development of navy blue wave 3, the market completed navy blue wave 2, a corrective phase that typically precedes a robust upward movement. The conclusion of navy blue wave 2 marks the end of the correction and the start of a new impulsive wave, signaling the continuation of the downtrend as navy blue wave 3 progresses.

The analysis underscores that the market's direction aligns with the next lower degrees of trend, highlighting the continuation of navy blue wave 3. This wave is particularly significant in Elliott Wave analysis, as it often represents a considerable and sustained price movement, reinforcing the expectation of further decline in the USD/JPY market.

A crucial level to monitor is 149.495, identified as the wave cancel invalid level. If the market falls below this level, the current Elliott Wave count would be invalidated, suggesting that the anticipated downward movement may not materialize as expected. This level serves as a key threshold for traders, who should reassess the market structure if it is breached.

Summary:
The USD/JPY daily chart analysis indicates that the market is in an impulsive trend phase, with navy blue wave 3 currently unfolding after the completion of navy blue wave 2. The downward movement is expected to persist, with 149.495 being a critical level to watch for potential changes in the market's direction.

(Click on image to enlarge)

U.S. Dollar/Japanese Yen (USDJPY) 4 Hour Chart

USDJPY Elliott Wave Technical Analysis

Function: Trend
Mode: Impulsive
Structure: Orange wave 3
Position: Navy blue wave 3
Next Lower Degrees Direction: Orange wave 3 (initiated)
Details: Orange wave 2 of 1 appears completed, with orange wave 3 now active.
Wave Cancel Invalid Level: 149.495

The USD/JPY currency pair, when analyzed using Elliott Wave theory on the 4-hour chart, is currently exhibiting a trend phase characterized by impulsive movement. The primary wave structure identified in this analysis is orange wave 3, signaling the continuation of a strong downward trend.

The market's current position is within navy blue wave 3, which is part of the broader orange wave 3 structure. This positioning indicates that the market is amidst a significant downward movement, which is typical for wave 3 in Elliott Wave analysis, often recognized as the most powerful and extended wave within an impulsive sequence.

Before reaching this stage, the market completed orange wave 2, a corrective phase that generally precedes a strong upward movement. The completion of orange wave 2 suggests the end of a short-term correction and the onset of the next impulsive wave, orange wave 3. This wave is now active, indicating that the downward momentum is expected to persist.

The analysis underscores that the market's direction aligns with the next lower degrees, further supporting the ongoing development of orange wave 3. The completion of orange wave 2 signifies that the market has likely finished its corrective phase and is now focused on moving lower in wave 3.

A critical level to monitor is 149.495, identified as the wave cancel invalid level. If the market falls below this level, the current Elliott Wave count would be invalidated, suggesting that the expected downward movement may not materialize as anticipated. This level serves as an important threshold for traders, as a breach would indicate a potential shift in the market structure.

Summary:
The USD/JPY 4-hour chart analysis suggests that the market is in an impulsive trend phase, with orange wave 3 currently unfolding after the completion of orange wave 2. The downward movement is expected to continue, with 149.495 being a crucial level to watch for any changes in the market's direction.

(Click on image to enlarge)