USD/JPY: Possible 3-Wave Rally Following BOJ Rate Decision
Ian Copsey | Feb 01, 2016 02:01AM ET
INTRADAY CHART
BIAS: This risks a down-up day
Resistance: 121.72-93 122.15-20 122.40 122.62
Support: 120.91 120.70 120.46-55 120.00-20
MAIN ANALYSIS: Snafu… I felt we needed another rally but not from 118.41… Thus, the direct follow-through after the BOJ announcement obviously came as a surprise. As today begins I feel we need an initial correction back to the 120.46-55 area. From there we should see a 3-wave rally that needs to reach the 121.72-75 area (allow for as high as 121.93). Here we will need a correction of around 70 points (approx). From here we will need another 3-wave rally that (depending on where in the range between 121.72-93 stalls) could stall as low as 122.15-20 or as high as 122.40-65. Therefore, make sure that the development I have described develops in order to look for bearish reversal indications. This should be the final high before daily losses resume.
COUNTER ANALYSIS: Only a break above 122.70 could see price extend to 122.85-90 and potentially 123.15-25 and max 123.40-50.
A direct break below 120.40 would see direct losses. There aren't too many obvious support areas but take care at 119.70, 119.10-30 and 118.95.
MEDIUM TERM ANALYSIS:
1st February: Well, as described above, the second leg higher was far more direct than expected but should complete a 3-wave move from between 122.15 and 122.62. Take care, there are higher levels but I feel the follow-through will be limited. Because this has developed in 3 waves there is a risk of a longer sideways consolidation (triangle?) but I cannot rule out a more direct resumption of losses.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.