Elliott Wave View on USDJPY suggests the rally from October 3 low is unfolding as a leading diagonal. A leading diagonal is one form of a 5 waves move with wave 1 and 4 overlapping and the structure looks like a wedge. Up from October 3 low, wave ((i)) ended at 108.93 (not shown on chart), and wave ((ii)) pullback ended at 107.87. Pair then resumed higher in wave ((iii)) and ended at 109.49. Wave ((iv)) pullback remains in progress and expected to end at 108.26 – 108.65 area.
Pair should then resume higher in wave ((v)) and it should also end wave 1 in higher degree. Afterwards, expect pair to pullback in wave 2 to correct cycle from October 3 low before the rally resumes. As far as pivot at 107.87 low stays intact in the first degree, expect pair to find support soon and resume higher. The alternative scenario suggest the rally from August 27 low ended at 109.49 as a 5 waves diagonal. In this scenario, pair should then pullback to correct the entire rally from August 27 low in larger 3 waves before the rally resumes.
USD/JPY 1 Hour Elliott Wave Chart
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