Elliott Wave & Intermarket Analysis For NIKKEI And USDJPY
Today we will talk about stocks, specifically Nikkei and why USDJPY can see higher prices.
Well, as you may already know, in EW theory after a three-wave corrective decline, the trend should remain to the upside. This is what we see in the stock market all the time. However, Nikkei got our attention, because we can see a nice five-wave rally after that three-wave a-b-c correction, which means that Nikkei remains in uptrend, but after another three-wave correction in the lower degree, where ideal support would be here around 21450 - 21250 levels, just keep in mind that confirmed can be only if it manages to turn back above 21770 region!
In the right picture you can see tight positive correlation between NIKKEI and USDJPY , which means that if NIKKEI points higher, then even USDJPY can see higher prices, so don't be surprised if USDJPY remains towards 109 area or higher!
So, seems like risk-on sentiment may continue and when we are in risk-on, we usually see stocks, which are followed by recovery on XXX/JPY crosses. That being said, be aware of a continuation on stocks, while XXX/JPY cross pairs may see a bigger recovery!
Be humble, trade smart and wait for the right sentiment to enter the market!
Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All of our work is for educational purposes only.