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The main Elliott wave count we are following is that wave ((iii)) is beginning to trend lower. This implies a large decline that carries down to 139 and possibly 128. Once the five-wave sequence is complete, much lower levels could be attained.
This would fit in line with shrinking interest rate differentials between the Japanese Yen and other currencies.
There is an alternative wave count we are following (red labels) that suggests the current decline in 2025 is wave ‘C’ of a large triangle pattern. Wave ‘C’ would find a bottom above 139.57 and likely in the 146-147 range.
Under the alternate count, USDJPY would trade in a large range between 140 to 158.
Bottom Line
USDJPY appears to be declining in a third wave towards 139. If USDJPY stalls near 146-147, then we’ll consider the possibility of the alternate wave count, a triangle.
Due to multi-decade highs in Japan interest rates, a large decline in USDJPY is the pattern to consider.
Short-Term Bias: Bearish
Long-Term Bias: Bearish
Key Level for Bearish Bias: 158.87
Initial Target: 139
Secondary Target: 128
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