Sharing my thoughts and observations on USDJPY - I am working this analysis in two setups: Wave (2)(3)(4)(5) and Wave (3)(a)(b)(4). I consider Wave 3ab4 a subset of impulse 3-4 within Wave 2345. I am treating the setup 2345 as a zig-zag considering that 2-3 is composed by 5 sub-waves (identified in red numbers) and 3-4 is composed by 3 waves (3-a, a-b and b-4). There are three reasons why I tend to believe that impulse 4-5 has started: 1) Divergence between highs a-4 and MACD, RSI and Stochastics, shown in bold light green 2) Wave 3-4 is already within Wave 2-3’s Fibo 50% and 61.8%, shown in pink and 3) Point (4) is located at Fibo Extension 61.8% of 3-a-b, shown in yellow. In this first option the entry point is immediate, with SL at the beginning of the whole setup (Point 2 @112.03) and TP1 @ Point (3) or 104.45, which by the way is the lowest price observed since November 2016. If price breaks this point, then I would aim to TP2 around 101, given that this where Fibo Expansion 100% of 2-3-4 (shown in green) lies (and it is confluent to Fibo 50% of the historical min-max of this currency pair. If price breaks Wave 2-3-4’s Fibo Expansion of 110% then I’d aim to TP3, located at Fibo Expansion 161,8% or close to 92.3, making this setup a perfect zig-zag. A more conservative entry point could be when price breaks and retests the blue line acting as the trend line (support) between 3 and b. We’ll see… happy pip hunting!
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.