RE-ANALYSIS: USDJPY - What I Am Expecting (HINT: Bearish Move)

FX:USDJPY   U.S. Dollar / Japanese Yen
In a post last week, I was expecting for this pair to start moving down in a bearish movement after hitting a resistance level (see Related Ideas: "UPDATE #1: USDJPY:- What Next? A Bull Cypher? Short w/GREAT R:R". Well, After re-evaluating this pair, I have to correct my previous assessment and give a new analysis of what is happening and what I expect is going to happen.

As you can see in the chart above, for the short-term, there really is only 2 possibilities: going up or going down. I know, I know. I hear you saying "REALLY? That is your BIG conclusion?". Well, yes. Let me explain.....


Monthly - Long-term
In this below chart, you can see I've labeled the wave count on the long-term uptrend that this pair has been on for the last 41 months as a almost completed 5 wave impulse wave. And that we are in the 5th wave right now. And within this 5th wave, prices are now in the (5) wave of 5. This signals that there will be a reversal point soon.
Prices have also exceeded (albeit slightly) the previous major high (established back in 2007) and is nearing the . 886 retracement of the second major high (established back in 2002). These are very long-standing major highs and you would expect some kind of reaction when prices have reached these points. This is what I am expecting to happen shortly, There is also bearish divergencce already happening. This is usually a early sign that a reaction is imminent.

Daily - Medium Term
This chart is a close-up on the wave count for wave (5) of 5. And if you focus in on the wave (5), you'll see I've broken down the count for wave (5) into 5 waves as well (in red). And within the internal wave count of wave (5), prices are now in the ending wave (v) of wave (5) of the larger wave 5. This is where I have now changed my analysis from before and am now seeing that prices can still go up in this trend just a little further to complete 5 waves.

4HR Chart - The Short-term View
And that brings us to the chart you see up top which is a close-up of wave (v) of the wave (5). In this chart, you can see that I've labeled the current price action to be a wave i of the wave (v). Yes, that's right. I am now believing that the recent uptrend was only wave i of the ending wave (5). And that wave ii should start soon. And that is where I am trying to answer is when?

Possibility #1:
Prices will continue a steady march up into the completion of the big bearish cypher (in purple) and reach over and past the major SR Zone, filling that cypher and quickly come back down through the zone. This price action would leave a bearish candle (possibly a pin bar ) visible on the monthly chart. Near the point where the bearish cypher would complete is also the 1.618 extension of the wave 3 of the wave i.

Possibility #2:
Prices would NOT continue upwards and instead will start it's way down and follow the path of the POTENTIAL bullish cypher (in red/beige). If it does this, then wave ii of wave (v) will have started. Where it ends is a hard to say.

Personally, I am leaning towards the first possibility and am now expecting (as opposed to last week's post where I was taking a SHORT position on a structure trade which I have closed with a small profit) that prices will go up to finish wave i and then start heading down in a wave ii. Currently, I am only watching and prefer not to take any LONG positions until I see prices reach the D point of the bearish cypher . Then I will take SHORT positions.

If you like my analysis and find it useful, please take a second to hit that LIKE button and follow me. It takes some time to create these posts and I would like to know if you find them helpful. As always, agree or disagree, your comments are welcome.
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Great analysis...really impressive!!!
Very thorough!
Some great analyse, well done!
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