USD/JPY Elliott Wave Analysis

USD/JPY – 94.61

USD/JPY – Wave 2 ended and selloff in wave iii of 3 is under way to 90.00

Despite falling to 91.73 last Monday, the cross-inspired rebound from there signals the wave (i) of larger degree wave iii has ended there and wave (ii) correction is now under way to retrace the move from 98.90 and gain to 95.32 (50% Fibonacci retracement of 98.90 to 91.73) and even 96.16 (61.8%) cannot be ruled out, however, as long as resistance at 97.00 holds, bearishness remains for the wave (iii) selloff to take place later this month.

Our latest preferred count is that the wave 2 is a double three with first set of a-b-c ended at 99.68, then the fall to 93.55 is an x wave and the second set of a-b-c ended at 98.90 with a short c to finish entire wave 2, hence wave 3 is unfolding with i: 94.88, wave ii: 97.00, further fall to 90.50 (1.618 times projection of wave i measuring from wave ii at 97.00 and wave iii is in progress and as indicated above the (i) of iii has ended at 91.73.

Below 91.73 support again would confirm the wave (iii) of iii is taking place to 90.50 (1.618 times of wave i measuring from wave ii), then towards the psychological support at 90.00.
Only if price is able to close above resistance at 97.00-20 on a daily basis, this would revive our previous A-B-C wave 2 correction scenario and indicate the C leg of wave 2 is still unfolding for gain to 98.90, then retest of 101.45.

On the monthly chart, we have changed our preferred count that an impulsive wave is unfolding with major wave III with circle ended at 79.75, then followed by wave IV with circle and is labeled as a triangle with A: 147.64 (11 August, 1998), B: 101.25, C: 135.20, D: 101.67 and E leg ended at 124.14 to end the wave IV with circle. Hence, wave V with circle is taking place with wave 1 ended at 87.10 earlier this year in January and wave 2 should falter well below 110.67 resistance and bring wave 3 in 2010. Once support at 87.10 is broken, the major downtrend should resume for fall to 85.00, 82.00 but the major low at 79.75 should hold on first attempt.