Since peaking at 125.80 in June 2015, USDJPY has fallen to a low of 107.70 last week. The fall accelerated upon the break of the key psychological level of 110.00. Many traders (and maybe central bank officials too) are asking "where could be the bottom for USDJPY this round?"
This is the first of 3 charts which I use to support my call for a major bottom in USDJPY at 107.00-30 level, leading to a very large rally well above 140.00 in coming months. Note that this is a long term call.
First, I shall refer back to the chart of USDJPY in the 1995-1998 period as shown here. From the low of 79.50, USDJPY did wave(1) to 87.90, wave(2) to 81.70 and wave(3) to 127.50. From there, it did a very sharp correction to 110.20 and reversed. That was actually wave(4), which retraced 38.2% of wave(3). As wave(2) was a deep retracement of wave(1), wave(4) was a shallow retracement of wave(3). This satisfied the Elliott Wave guideline of wave alternation between wave(2) and wave(4).
From wave(4) level of 110.20, USDJPY staged a huge wave(5) rally to 147.70 in Aug 1998. The primary cause was the Asian Financial Crisis which began in July 1997 with the devaluation of Thai Baht. JPY suffered a contagion from the collapse of other Asian currencies because 40% of Japan's exports went to Asia.
This is the first of 3 charts which I use to support my call for a major bottom in USDJPY at 107.00-30 level, leading to a very large rally well above 140.00 in coming months. Note that this is a long term call.
First, I shall refer back to the chart of USDJPY in the 1995-1998 period as shown here. From the low of 79.50, USDJPY did wave(1) to 87.90, wave(2) to 81.70 and wave(3) to 127.50. From there, it did a very sharp correction to 110.20 and reversed. That was actually wave(4), which retraced 38.2% of wave(3). As wave(2) was a deep retracement of wave(1), wave(4) was a shallow retracement of wave(3). This satisfied the Elliott Wave guideline of wave alternation between wave(2) and wave(4).
From wave(4) level of 110.20, USDJPY staged a huge wave(5) rally to 147.70 in Aug 1998. The primary cause was the Asian Financial Crisis which began in July 1997 with the devaluation of Thai Baht. JPY suffered a contagion from the collapse of other Asian currencies because 40% of Japan's exports went to Asia.
