Wave marking analysis: On Friday the USD/JPY pair has begun its descent that yesterday acquired additional dynamics. As a result, the price has reached levels near figure 81. In case this descending movement develops according to the corrective scenario, then the yesterdays low can be considered as the end of the wave A in 2 (or B). If that proves to be so, then, when the formation of the wave B has been completed, the pair will continue the movement towards the point 80.80 or even 80.55. At the same time the MACD divergence looks controversial, as its elaboration can lead to the fall of quotes below the minimum of April 16 (80.30).
Targets for the option with the wave 2 or B: 80.83 – 23.6% according to Fibonacci 80.55 – 11.4% according to Fibonacci
Targets for the option with the wave 3 or C: 82.02 – 76.4% according to Fibonacci 82.30 – 88.6% according to Fibonacci
General conclusions and trading recommendations: Presently we can see that despite the formation of the ascending part of the trend, we cannot define properly, which part of the trend has begun: whether this is a correction against the pair’s decline that took place in recent weeks or whether this is the resumption of the global ascending trend. The inner wave marking of the current ascent of quotes point at 3-wave structure. It is possible that the wave B (corrective) will be formed followed by the formation of the wave C (impulse). Also the whole ascending structure is likely to be transformed into 5-wave one. That is why the pair is expected to continue its downward movement towards 80.55 (wave 2 or B) and followed by the reversal towards the 82.30 level (wave 3 or C).
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