Simple Moving Average(SMA) 200-period (bold, gray)
RSI-14 with Simple Moving Average 5-period of RSI attached.
Elliott Wave Principles
Market and Price Action (patterns, candlesticks)
Intraday pivots and Intermediate-term support and resistance
Multiple Time-frame Analysis
- USD/JPY has declined since the NFP for February came out last Friday. This came after a 5-wave rally that started 3/2. The decline also does have a corrective structure, or at least not an impulse structure yet.
- Also note that the throwback has retraced almost 78.6%, visiting the central equilibrium of the bottom formation it is trying to build strength from. The USD/JPY should not venture below 81.90. The RSI should also return quickly from below 40, and should definitely not break below 30 for this short-term bullish outlook to remain strong.
- On the other hand the market has a chance here confirm bullish intend, with a slingshot from the SMA 200.
- We see a declining channel which started at 82.50. Therefore a break above 82.50 should be a good clue for bullish continuation. The RSI should also confirm by breaking above 60, then 70. This is a bullish signal first to test the 83.00 pivot, then the 84.00 resistance, and possibly the 84.50 resistance. The bullish scenario is limited, until we break above 84.50, then we would be able to consider the USD/JPY to have bottomed.
- The 4H chart shows the momentum has not turned bullish yet, but we definitely violated the bearish momentum.
- A swing projection goes to 83.40 area while the 138.2% projection for example targets 84.00. I would look for this rally to be also in an impulse wave manner, and ease off after 5 waves, because that would have strung together 2 sets of impulse waves.
- While a third bullish impulse wave to follow will convince us the market is trying to bottom, it is also possible that we would have completed an ABC correction to the decline since 84.00. In both scenarios, we should see a rally from the 82.00 support area.
Will the USD/JPY hang on to developing this bottom? We would love to hear what you think.