USDJPY Poised to Sell Off Again?

FX:USDJPY   U.S. Dollar / Japanese Yen
535 10 3
The USDJPY             chart is looking quite similar to the SPX500             chart. The wave picture appears incomplete to the downside. The current upward push terminated at a former swing low and is within the bounds of a 38-50% retracement of the preceeding 3rd wave.

Therefore, we are anticipating a fifth wave lower to retest Monday's low near 116.

Here are the internals we are watching:

Elliott Wave Count: It appears we are in a wave (v) lower to retest 116. The counts for EURUSD             , SPX500             , and Gold             all show US Dollar             weakening.

Wave Relationships: The wave (iv) appears to have terminated in typical relationship to wave ( iii             ). That places a target for wave (v) near the wave ( iii             ) low of 116.

OBV: 1 hour and 4 hour OBV is hovering near lows even though price still has a couple hundred pips to match the lows. This means down volume is still in control and is a bearish symptom.

SSI: Sentiment is currently positioned at +2.5. Both long and short positions have dropped compared to Friday's levels. Positioning dropped means traders are less committed to the market...possibly out of fear. However, at +2.5 it is still an extreme SSI             reading.

Since the stock market sold off and ended the day on its heels, this suggests the USDJPY             may follow suit.

Will China step in and rescue equities?
please , update UJ again.
Might be a 4th wave triangle - still too early to tell. The 120.30-120.50 area appears strong. SSI is holding near +2.4 so not much changing there.

GBPJPY may be a better way to trade JPY right now.

thank so much.
Hey J! Nice setup! One thing, I am holding off pushing the button because the wave 4 on daily is only one candle compared to wave 2 which did 4 days. Maybe we will have more complex wave 4 how do u think? I guess it's wave a of 4 was done and we are in a wave b of 4.
+1 Reply
aibek aibek
I still think the impulse begins later than everyone thinks.
In my opinion proportion is off in these counts.
IvanLabrie IvanLabrie
(and we are in wave 2 now) Either way, we will see a selloff soon, in less than 4 daily bars.
I see what you are saying. From a larger degree, after this proposed 5 wave move down terminates, it could simply be just a large downward correction. So for right now, I'm looking towards lower levels, but not too aggressively.
Hi AibekB - that is one possibility I have an eye on. From a bigger picture perspective, I am anticipating a 5 wave move lower. The Asian trading session overnight will likely set the tone as to being b of 4 or whether we are in the 5th wave.
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