Elliott Wave Analysis: USDJPY Yearly Update

Hello traders!

Today we want to update our USDJPY chart from January 2021, when we mentioned and highlighted the bottom and bullish reversal with ending diagonal (wedge) pattern and weekly bullish engulfing candlestick formation.

As you can see on the left, since then USDJPY is in massive and impulsive weekly rally within a five-wave cycle, where we are tracking final wave V. However, looking at the smaller time frame, in the 4-hour chart on the right, we can still see it trading in an extended wave V, which should be completed by a five-wave cycle of the lower degree.

That being said, seems like USDJPY has room for more upside, but currently it can be finishing wave (III) of V around EW channel resistance line, so be aware of a pullback in wave (IV) that can occur anytime soon.
Once USDJPY starts sharply falling back below EW channel support line, this is when we can start tracking a correction in wave (IV), where ideal support would be around December 2016 highs and 118 area.

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Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All of our work is for educational purposes only.