Briefly –
- USD/JPY at 20-year highs.
- BOJ leaves financial policy unaltered.
- Elliot Waves indicate 140 and above.
The Japanese yen takes another blow following retracements that persisted for three weeks. USD/JPY’s climb past 132 reflects the yen’s twenty-year low. Meanwhile, the trend remains bearish.
Individuals interested in reversal might experience massive pains as the crash seems detrimental. Yen remains under pressure as investors sell the currency due to its colossal monetary policy divergence with the Federal Reserve.
The Fed has hiked the funds’ rate and seems prepared for the same soon. The United States Fed hinted at a further 100 basis point hike in summer, whereas the European Central Bank contemplates similar moves. However, the BOJ remains different.
The Bank of Japan’s financial policy divergence with other leading central banks globally clears the downside road for the yen. Elliott Waves Theory shows the Japanese currency could plummet to 140 and below by 2022-end.
Elliot Waves Indicates 140 and Beyond
USD/JPY’s latest gains emerged ahead of the May monthly candle close. The swift move beyond 130 confirms the end of a flat setup that began nearly one year ago. The flat pattern boasts fascinating characteristics, like wave c and wave a equality. Furthermore, this equality comprises price and time.
That means the two waves have to be equal in time and price. A running flat emerges after the pair meets these two conditions. Also, Elliot trades use price actions that follow patterns. The market’s velocity highlights whether the setup was a portion of a massive retracement or an individual one.
AS the USD/JPY swiftly moved beyond 131 faster than wave c’s formation, it confirms the ABC is a modest retracement. The suggestions are the large degree’s second wave ended during May’s final trading days, and wave three has begun.
Elliot Waves stated that wave three within impulsive structures should be over 161.8% compared to wave 1. Thus, 140 remains a target by summer end before 145 in 2022-end when the 5-wave completes.
What are your thoughts about the Japanese yen with BOJ’s soft stance on monetary policy? You can leave a reply in the comment area below.