Elliott Wave InternationalmyEWISocioniomics.Net
Home > Currencies

USD/JPY: What a "Third" Elliott Wave Looks Like
The Japanese yen has been getting weak in a hurry -- a signature third-wave move.

By Vadim Pokhlebkin
Mon, 04 Feb 2013 17:00:00 ET
Add to Facebook Add to Twitter Email to a friend Printer Friendly

According to a recent study, 

"Lui and Mole (1998) surveyed the use of technical and fundamental analysis by foreign exchange dealers in Hong Kong in 1995. These dealers stated that technical analysis was more useful than fundamental analysis in forecasting both trends and turning points.
(Source: ssrn.com, "Head and Shoulders above the Rest? The Performance of Institutional Portfolio Managers who Use Technical Analysis.")
Elliott wave analysis is a technical analysis method. That's what the editor of our forex-focused Currency Specialty Service, Jim Martens, used to turn bullish on USD/JPY on October 5, 2012:
"USDJPY fell beneath 77.657 as anticipated. We’re introducing a possible triangle from March 2011 with wave D bottoming. A wave E rally should carry USD/JPY near 82."
That proved to be a great call. Since October, the most popular trade in forex has been to sell the Japanese yen, buy the U.S. dollar.
As a result, USD/JPY, the exchange rate between the dollar and the yen, has been moving up in what an Elliottician would only refer to as a "third wave" (partial Elliott wave labels shown):

In the basic 5-wave Elliott wave sequence, third waves are "wonders to behold," to quote the discoverer of the Elliott Wave Principle, R.N. Elliott. Like the Energizer Bunny, third waves "just keep going." The USD/JPY rally is a great example.
In fact, the move has been so strong that last week it overshot a typical price target for third waves: a Fibonacci 1.618 times the length of wave one. On the chart above, you can see that Fibonacci price target marked in blue.
But the yen's losing streak may be hitting a pause. In his latest Currency Specialty Service intraday update, Jim Martens warns subscribers "not to chase" USD/JPY higher, at this point
You'll find our latest USD/JPY price targets inside Currency Specialty Service online now >>

Yen, Euro, Cable, Aussie... 24-Hour-a-Day Forecasts for 11 Forex Pairs

Our Currency Specialty Service was previously one of EWI's packages reserved mainly for the forex pros. 

Today, you can select just the coverage of the markets you need -- and get the same level of service.

You get 24-hour-a-day forecasts for these 11 forex pairs. Take a look >>





Real Time Trading



EWI's Currency Pro Service delivers 24-hour-a-day coverage of the world's most traded currency pairs so you'll know every Elliott wave implication of every market move. Subscribe now and get instant access to actionable forecasts for:

USD Index 

Discover what a team of Elliott wave experts can do for your forex trading>>

Free 14-page eBook

Trading Forex: How the Elliott Wave Principle Can Boost Your Forex Success

EWI's Senior Currency Strategist Jim Martens pulls from 25+ years of experience using Elliott wave analysis to show how you can put the power of the Wave Principle to work in your forex trading.
Download Trading Forex free.


© 2016 Elliott Wave International
TRUSTe online privacy certification

The Elliott Wave Principle is a detailed description of how financial markets behave. The description reveals that mass psychology swings from pessimism to optimism and back in a natural sequence, creating specific Elliott wave patterns in price movements. Each pattern has implications regarding the position of the market within its overall progression, past, present and future. The purpose of Elliott Wave International’s market-oriented publications is to outline the progress of markets in terms of the Wave Principle and to educate interested parties in the successful application of the Wave Principle. While a course of conduct regarding investments can be formulated from such application of the Wave Principle, at no time will Elliott Wave International make specific recommendations for any specific person, and at no time may a reader, caller or viewer be justified in inferring that any such advice is intended. Investing carries risk of losses, and trading futures or options is especially risky because these instruments are highly leveraged, and traders can lose more than their initial margin funds. Information provided by Elliott Wave International is expressed in good faith, but it is not guaranteed. The market service that never makes mistakes does not exist. Long-term success trading or investing in the markets demands recognition of the fact that error and uncertainty are part of any effort to assess future probabilities. Please ask your broker or your advisor to explain all risks to you before making any trading and investing decisions.