Published on 30th October 2018
The USD/JPY currency pair corrected in a three-wave sequence before rebounding to the upside. We interpret this to be a fourth wave of minuette degree. Hence, an ending diagonal remains the most likely scenario. It is likely to unfold into early December before reversing multiple degrees of trend. The black pattern will remain our base case as long as the contracting diagonal support doesn’t get violated.
Violation of that support most likely means that the “dirty triangle” plays out instead. It basically implies that price action from May to September was a triangle instead of the first two waves of a diagonal. The conclusion from that is that the USD/JPY topped in early October. The most recent wave action was an irregular flat or part of a complex wave. Both are resolving to the downside.
All in all, the black count has slightly higher odds until the black support gets violated.
The analysis above is an abstract of our USD/JPY Premium Analysis. Subscribers can access multiple timeframes, which are not displayed on this page.