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Flat Correction

11 November 2016, USD/JPY

Flat Correction

Wave Analysis

Earlier today, the corrective wave (c) traded short as anticipated but could not go beyond the the end of the impulsive wave (a). The just witnessed three wave cycle is a flat correction, with the impulsive wave (c) not going beyond the end of wave (a), there is less momentum to the lower side. This pair could enter into a possible consolidation not going above $106.92 or below $106.42, unless there is a clear breakout out of this consolidations, we choose to sit on the sidelines and only buy or sell depending on the direction of breakout. Expect a similar consolidation in USD/CHF and USD/CAD. These pairs have a strong positive correlation of up to +89% and will have a similar price action during this intraday.

Trade Recommendations:

Remain flat and only buy above $106.92 with a target at $110.37 or sell below $106.42 with an ideal target at $105.37.

Graham Osano
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