Wave Analysis:

As it was expected during yesterday’s trading session the USD/JPY pair worked out the target level near 78.70. It began its downward move, adjusting to wave 3 or c. At the same time parity between wave 1 (a) and wave 3 (c) as well as a tendency to MACD divergence give us reasons to assume the possible halt in an ascending trend development and consequently the price drop to the level of figure 78.

Targets for Up Wave 5 in c:

78.71 – 23.6% of Fibonacci
78.96 – 11.4% of Fibonacci

Targets for Down Wave 4 in c:

78.41 – 38.2% of Fibonacci
78.16 – 50.0% of Fibonacci

Summary and Trading Recommendations:

The formation of the up wave continues at the moment and it is starting from the correctional channel. Now an upward move towards 78.71 and 78.96 levels, corresponding to 23.6% and 11.4% of Fibonacci, may continue. The quotes retreat may begin in the terms of wave 4 in c with the targets 78.41 and 78.16 corresponding to 38.2% and 50.0% of Fibonacci. Divergence of MACD implies that downward move is about to happen and probably it has already started. Wave c may be very extended and complex.