As the $USD tends to his gored wounds, expect a probable range-bound action in the days ahead.
PROBABLE QUANTITATIVE/GEOMETRIC INTERPLAY:
A nascent geometry is taking the shape of a , but given the structural bounds and Predictive Model data, I would expect this geometry to evolve into a possible Geo , in which case, its rules would differ.
For instance, Predictive Model is suggesting a probable floor in the 120.474/120.265 range, which would define a possible 5-prime position, and thus limit subsequent upward moves to the price level corresponding to Point-4 (range defined as 124.210 to 124.431).
This combined Predictive/Geometric analysis is very speculative, but remains within the boundaries of high probabilities in terms of how the Predictive/Forecasting Model and the Wave/Geo have behaved individually.
The Geo is simply an elaboration of the Wolve Wave pattern, taking into account internal geometric requirements, such as a reciprocal symmetry of the 1-2 Leg, a double or triple of the 2-3 Leg in terms of internal construction, as well as price compensations in terms of reversal whenever price would reverse from an ectopic Point-5 position, defined as a Point-5-prime (5'), whereby the geometric compensation would expect a lowered probability of price returning to the 1-4 Line (as if the rule in ), but instead offer a high-probability of price reversing to the level corresponding to Point-4 (in the case of a point-5-second reversal, then the compensation would lower the 1-4 Line as the least probable target, compared to attainment of level of Point-4 as a moderate probability target, and the level corresponding to point-3 as the highest probability target - This is in essence the definition of the "Off-Set Rule of Probability Target", or simply the "Offset Rule".
In this 4-hour chart, a channel can be drawn given the (pink) ranges illustrated in the chart, using known, reliable technical elements, such as geometry, Fibonacci (lower range happens to fall at of points 2 and 3) and structural analyses - All this remains purely speculative, but the tools are individually consistent and probable in forecasting power.
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Price continues to follow the geometric outline as shown - It remains to be proven that this is the controlling geometry that would bring $USDJPY to lower lows. Market expectation remains supportive of $USD Index, whereas USDollar wave analysis remains bullish, both acting as contrarian expectation to this geometry.
I have to assume that as price moves drastically contrary to the Elliott Wave form projection, I was likely neglecting to consider the origin of Point-A as a potential ziz-zag, which is one of the requisite for the initiation of this pattern. I will post an alternate Elliott Wave pattern that is likely offering the correct count, not simply because it makes more sense relative to the first ZZ correction that gives it a rational point of origination, but also because the larger timeframe is likely developing into a bearish impulse - For now, I will keep the two possibilities open to either possibilities - I will look at it from the point of view of the Model and see what higher probability direction we should consider - From a fundamental standpoint, markets are down, emerging markets are hemorrhaging capital that is leaving for only two known safe-heavens: USD and Gold. As these two historically walk in inverse pace to one another, it will be interesting over the months to appreciate which of the two might benefit the most from this global depreciation and race to the bottom: The larger countries, flush with foreign currencies are likely to keep selling their sovereign currencies in order to devalue against other devaluing players.
Thing is, to devalue any currency requires buying a foreign counter-part that is liquid, not likely to depreciate any faster than any other currency, and might retain value as a recognizable diplomatic tool. So, what do you think might occur to the US Dollar when EMs seek to gain exporting power wherever their currency is mainly exchangeable against the USD. It is this fundamental issue that I would keep in mind whenever looking at the possibility of the USDJPY going in either direction.
Following is a $DXY chart I posted 16 months ago ... It appears that the US Dollar index has reached a level where a correction - not a reversal - is due:
The point of contention here is whether the wave that defines Point-A is a true a-b-c internal structure in either of the scenarios. It appears to be quite apparent in the latter chart, and less so in the former - Letting price unfold is also another viable strategy here, using a structure-based approach to this dilemma as defined above.