A decline on USDJPY was much sharper than we thought at first sight so we need to respect the market sentiment and go with the current trend. That said, we adjusted the wave count and are looking down now, back to 115.97 level and possibly even to 114.00-115.00 by the end of this month. Despite our current bearish view on USDJPY, we still think that leg down from 121.68 belongs to a big downward correction on the daily chart. If we are correct then the price is now in minor blue wave four within an ongoing bearish impulse that can resume after retracing back to 118.20 resistance.
USD Index is accelerating to the downside after 98.45 was broken last week which puts wave C) in play that already took out that 97.22 low. However, weakness may not be here for a long-time as the current decline from 99.87 can already be in its late stages with five sub-waves. As such, traders must be aware of a bounce; ideally in impulsive fashion later this week.
USD Index, 4H
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