Three patterns are pointing us to a downtrend in the next few months.
1. The upward-pointing wedge (blue lines) tends to break downwards. Look for the bottom support to break in the next few days or after another trip up to the top of the range and back down.
2. We have a clear as day Elliot wave pattern happening. The C wave is incoming before the next big uptrend.
3. After a decades-long inverse head and shoulders pattern played out and broke the neckline at 125, I'm still looking for a retest of 125 before taking off to 200 and beyond.
Good luck and enjoy!
1. The upward-pointing wedge (blue lines) tends to break downwards. Look for the bottom support to break in the next few days or after another trip up to the top of the range and back down.
2. We have a clear as day Elliot wave pattern happening. The C wave is incoming before the next big uptrend.
3. After a decades-long inverse head and shoulders pattern played out and broke the neckline at 125, I'm still looking for a retest of 125 before taking off to 200 and beyond.
Good luck and enjoy!
Comment:
Rising wedge broke to the downside as was most likely.
Now is a low-risk short entry. 130 target.
Now is a low-risk short entry. 130 target.
Comment:
Nobody was predicting the particular events over the last 3 days that led to the dollar's sudden weakening. Only the chart was telling us it was coming.
Since the head and shoulders pattern targeting USDJPY = 202 still needs to play out, perhaps we are in for some very bad news for the yen incoming later this year!!
This drop was sudden and sharp, so we may see some retrace to the upside before proceeding to the targets.
Since the head and shoulders pattern targeting USDJPY = 202 still needs to play out, perhaps we are in for some very bad news for the yen incoming later this year!!
This drop was sudden and sharp, so we may see some retrace to the upside before proceeding to the targets.
Trade closed: target reached:
The 130 level was hit with a wick down to 130.50.
Now there's a little relief rally to 131.30.
I am expecting it to complete the pattern to the 125 area after this rally, but I am currently positioned neutrally between the dollar and yen.
At 124 - 125 is the next higher confidence time to enter long, and I believe that will be the start of a long devaluation of the yen relative to the dollar, while all currencies continue to devalue against hard assets.
Now there's a little relief rally to 131.30.
I am expecting it to complete the pattern to the 125 area after this rally, but I am currently positioned neutrally between the dollar and yen.
At 124 - 125 is the next higher confidence time to enter long, and I believe that will be the start of a long devaluation of the yen relative to the dollar, while all currencies continue to devalue against hard assets.
The target of a rising wedge is the height of the back of the wedge, which depends where you draw it, but I have it at about 6.
That would put the target at 129.80 - 130.00
However, the target is often overshot. I am looking for a consolidation at 130, and then a bottom to the pattern at 124 - 125 before a new longer-term uptrend.