Top Trade Idea For October 7th, 2014 – USD/JPY
By Gregor Horvat on Oct 7, 2014 02:21:01 GMT
Today we will focus on USDJPY which has been in strong uptrend for the last few months, particularly during September when pair gained more than 600 pips. On the daily chart below we can see the price action from July with accelerating bullish waves in August and September. Well, you will notice that in the last two weeks or so pair did not go far. We actually see a sideways move in around 200 pip range. Therefore we suspect that market is just slowing down in a corrective pause before we get a next break higher. Based on previous sharp rise, which we think it was wave 3, then we can suspect that current slow and range move is wave 4.
USDJPY DIALY Elliott Wave Analysis Chart
Wave 4 is a corrective wave so it must be made by three legs. On the 4h chart below we can see that market is correcting lower, now trading in a third leg of decline from 109.90 that we think it’s wave c), final leg of a zigzag from above 110. Usually wave c) will be equal to wave a) measured from wave b) point. In our case that comes in around 107.80 while the second support of 138.2% extension comes in at 107.20. As such, 107.20-107.80 makes an interesting region where current corrective decline for wave 4 could bottom. Based on Fibonacci levels and wave count the plan can be as follows:
Buy Limit ½ at 107.85
Buy Limit ½ at 107.45
Stop losses at 106.80
Target at 111.50
USDJPY 4h Elliott Wave Analysis chart
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About Gregor Horvat
Gregor Horvat, based in Slovenia, has been in the forex markets since 2003. He is a technical analyst and individual trader who has worked for Capital Forex Group and TheLFB.com. He also is founder of forex services on www.ew-forecast.com. EW-Forecast.com provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). Website:http://www.ew-forecast.com/TryEW-Forecast.com’s Services For 14 Days for just €1 at http://www.ew-forecast.com/service .
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