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JPY Up After NFP; More to Come – Elliott Wave Analysis

Hello traders! I hope that you had a great and relaxing weekend as markets can turn up to be very interesting this week after the strong sell-off in US stocks on Friday, after the US jobs report. We see markets in risk-off mode, but interesting.

Despite a strong move down in stocks, the USD did not move much to the upside. We have seen a strong upward reaction on US Notes and German Bunds while stocks were falling. This was ideal for lower USDJPY and Yen crosses.

Market Correlation 30min

market correlation Apr 07 2014 intra

Now the question going through your head right now is “will this risk-off atmosphere stay here or not?”

Well, I believe in the technical picture of market swings. So if we take a look at the S&P then we can see five waves to the downside from 1892 down to the Mar 30 gap. The decline is impulsive, thus it’s part of an ongoing weakness, so we will be looking for more weakness after any short-term three wave rally.

This three wave rally may occur soon if we respect gap levels that usual react as reversal zone.

E-mini S&P500 1h

sp Apr 07 2014 intra

So if we respect the bearish picture of the S&P then we may also consider a bearish continuation on USDJPY and even take advantage of intermarket analysis. A decline there has also unfolded in impulsive fashion, so we may consider shorts with our members in the next 24-48 trading hours.

Gregor Horvat

Gregor Horvat

Grega Horvat Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of Ew-Forecast, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc. He recently won the award on FXStreet.com for Best Forex Analysis in 2016. At Ew-forecast he helps clients and educates them about the Elliott wave principle and how to label and track unfolding patterns in real time. His approach to the markets is mainly technical. He uses a lot of different methods when analyzing the markets such as candlestick patterns, MA, technical indicators etc. His specialty, however, is Elliott Wave Theory which could be very helpful especially if you know how to use it in combination with other tools/indicators. EW-Forecast To be involved in the market effectively, you need the right guidance and resources, and our team can help you to achieve that. Our team is providing advanced informations about Elliott Wave theory in real time. The Elliott Wave Principle gives you a method for identifying the behavior of the markets and at what points the market is most likely to turn. We help new traders who are interested in Elliott Wave theory to understand it correctly. We are doing our best to explain our views as simple as possible with educational goal, because knowledge itself is power!