USDJPY Showing a Wedge

12 Jul 2022

Hey traders,

USD is trading higher across the board based on hawkish FED, after good US NFP figures last week. The next key event to watch is going to be tomorrow when we will get the US CPI data. This will be an important event for traders' decision to see if inflation is slowing down or will FED have to be even more aggressive. If suddenly CPU numbers will really come down, then we think US yields will drop as 10-year US notes can break above the horizontal resistance. And this can then be a trigger for a drop on USDJPY.

In fact, from an Elliott Wave perspective, we see an ending diagonal which is known as a reversal pattern. Usually you will see a strong reversal in a trend when the ending diagonal is finished. But when it's that? Well, when lower trendline support and wave (4) swing supports are broken. For now that's not the case, so it's deffinitely too soon for any "reversal" to be confirmed, but it's good to have it in mind while pair trades below 140.40. That's an invalidation level as wave three must not be the shortest.

Trade well,

Grega

19 Jul 2022

Nota

Talked about USDJPY wedge last week (ending diagonal), pair survived the 140.20 invalidation level with a throw-over formation. Now coming back to the lower line. Let's see if can take it out.