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USDJPY Elliot Waves Analysis For 3 May 2016

03 May 2016, USD/JPY

Wave Analysis:

USD/JPY is currently trading with a bearish bias. Yesterday, the pair traded short as previously forecasted and is still pretty much bearish. We expect the pair to continue trading to the lower side but only within the descending channel. A clear breakout above this channel will lead to an upward acceleration towards 107.80, while a clear breakout below the channel will lead to acceleration to the lower side. Ideally, as long as the pair trades within the descending channel, expect an acceleration to the lower side. This pair should be traded alongside, USD/CHF, USD/CAD, GBP/JPY, GBP/CHF, and AUD/JPY. These pairs have a strong positive correlation of up to +0.95 and will likely have a similar price action during this intraday.

Trade Recommendations:

As long as the pair trades within the descending channel, remain short with your target at 105.39, a clear breakout below this target will push the price further to the lower side with next target at 103.92. In an alternative case scenario, should the price ends up closing above the descending channel, go long with your target at 107.80.

Graham Osano
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