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Elliott Wave Analysis: USDJPY Yearly Update

FX:USDJPY   U.S. Dollar / Japanese Yen
Hello traders!

Today we want to update our USDJPY chart from January 2021, when we mentioned and highlighted the bottom and bullish reversal with ending diagonal ( wedge ) pattern and weekly bullish engulfing candlestick formation.

As you can see on the left, since then USDJPY is in massive and impulsive weekly rally within a five-wave cycle, where we are tracking final wave V. However, looking at the smaller time frame, in the 4-hour chart on the right, we can still see it trading in an extended wave V, which should be completed by a five-wave cycle of the lower degree.

That being said, seems like USDJPY has room for more upside, but currently it can be finishing wave (III) of V around EW channel resistance line, so be aware of a pullback in wave (IV) that can occur anytime soon.
Once USDJPY starts sharply falling back below EW channel support line, this is when we can start tracking a correction in wave (IV), where ideal support would be around December 2016 highs and 118 area.

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