USDJPY and stocks in steep decline: UJ to break 112 round?
Updated
UJ is in a steep decline, thanks to stocks tanking and Gold rising.
Risk off sentiment is strong right now, and should remain so until the FOMC decision Wednesday.
And the FOMC decision and comments may actually make is WORSE if they are hawkish and looking to hike more than once in 2019.
For now UJ looks to be working on a wave (3), which is nearly complete and preparing for a bounce.
Wave (4) should create a decent bounce, but I doubt it will go higher than 113 round or even close.
Wave (5) should typically come to the 4.236 extension of wave (1), especially given the momentum of (3).
Lets see how this plays out.
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Background:
This UJ story starts in early October 2018, with my search for the mythical ''top''
As the downtrend progressed, I started looking for a ''final leg'' down
Then it seemed we had found a temporary bottom:
But then came the Stock market swoon, so it seemed to need one more leg down yet
Then another bounce when Trump-Xi talks were rumored to be making good progress
Of course, we all know how that turned out, and stocks have been diving. So the current plan to target a ''bottom'' to close shorts
Risk off sentiment is strong right now, and should remain so until the FOMC decision Wednesday.
And the FOMC decision and comments may actually make is WORSE if they are hawkish and looking to hike more than once in 2019.
For now UJ looks to be working on a wave (3), which is nearly complete and preparing for a bounce.
Wave (4) should create a decent bounce, but I doubt it will go higher than 113 round or even close.
Wave (5) should typically come to the 4.236 extension of wave (1), especially given the momentum of (3).
Lets see how this plays out.
.
.
Background:
This UJ story starts in early October 2018, with my search for the mythical ''top''
As the downtrend progressed, I started looking for a ''final leg'' down
Then it seemed we had found a temporary bottom:
But then came the Stock market swoon, so it seemed to need one more leg down yet
Then another bounce when Trump-Xi talks were rumored to be making good progress
Of course, we all know how that turned out, and stocks have been diving. So the current plan to target a ''bottom'' to close shorts
Note
Here we are, perhaps end of wave 3 and a bounce for wave 4 possibly close up shows a near exact bounce at the 3.0 fib
Note
support is looking a little better, but clearly the risk sentiment is holding it down 
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