USDJPY pair made a sharp move to the upside after US Non-Farm payrolls report last Friday. Financial media would make traders think that up move happened because of NFP whereas in reality, the move had nothing to do with NFP. It was a very technical move and we forecasted this before the move happened. Let’s take a look at 1 Hour chart of USDJPY pair presented to members of www.elliottwave-forecast.com on 3.6.2015 (Asian update)
Chart above shows we were expecting buyers to appear in the highlighted area (119.89 – 119.76) for a move higher toward 120.79 – 121.02 to complete red wave “W” and then another pull back in red wave “X”. How did we forecast this move? It wasn’t guess work or magic, it was based on the sequence of swings. Market moves in sequence of 3, 7 , 11 and so on swings (corrective) and 5,9,13 and so on (impulsive). If you take a look at the move up from ((x)) low, we can count 9 swings up until red w which means an incomplete sequence. Therefore, while above (x) low at 119.34, we should have been expecting another swing higher to complete 11 swings from ((x)) low. That’s why the chart above was calling for another high to complete the cycle and that’s exactly what happened. Now that we got the new high that we were looking for and looks like wave “W” is in place. What are we expecting next? Let’s take a step back and take a look at 240 minute Elliott wave count of USDJPY pair.
Once again swing sequence is at work here as we can count 5 swings up from red x low (1/15) at 115.82 until red W which makes it an incomplete sequence. Thus, we are expecting a pull back in wave “X” and another swing higher to complete 7 swings up from red x low. As there is no red arrows on the chart so we don’t like selling the pair and expect proposed wave “X” pull back to find buyers in the dips in 3, 7 or 11 swings as far as pivot at (X) low (118.10) remains intact. Target for next leg higher would be 100 – 123.6 ext area of (W)-(X) which lies between 122.71 – 123.83.
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