USD/JPY: Anticipating Further Downside
In my latest analysis of the USD/JPY pair on the daily time-frame, I've identified a potential continuation of the bearish trend based on a combination of Elliott Wave theory, Ichimoku Cloud indicator, and volume profile analysis.
Key Observations:
Elliott Wave Structure:
I've marked the completion of WAVE I in the past, which typically suggests that a corrective move (WAVE II) is either unfolding or has already completed. This setup could lead to the emergence of WAVE III, often the most powerful in the Elliott Wave sequence. Given the current market conditions, I'm anticipating further downside movement as part of this wave structure.
Ichimoku Cloud Analysis:
The price has decisively broken below the Ichimoku cloud, a strong bearish signal in Ichimoku trading strategies. The cloud has acted as resistance, and with the price now clearly below it, the bearish trend seems likely to continue. This breakdown is critical, as it aligns with the potential for further declines.
Volume Profile Insights:
The volume profile on the right side of the chart highlights key price levels with significant trading activity. These levels often act as strong support or resistance zones. The recent breach below a high-volume area suggests increased momentum on the downside. I’ll be watching these levels closely for potential reactions, but the current setup points to a continuation of the bearish trend.
Trading Rationale:
Given these technical factors, my outlook for USD/JPY remains bearish. The confluence of a completed Elliott Wave structure, the breakdown below the Ichimoku cloud, and the price moving through critical volume levels all support this perspective. I'm positioning to take advantage of this potential continuation of the downtrend, targeting key levels below as the market unfolds. As always, I'll be keeping a close eye on any signs of reversal, particularly if the price approaches major support zones or if the market sentiment shifts.
PJB
Key Observations:
Elliott Wave Structure:
I've marked the completion of WAVE I in the past, which typically suggests that a corrective move (WAVE II) is either unfolding or has already completed. This setup could lead to the emergence of WAVE III, often the most powerful in the Elliott Wave sequence. Given the current market conditions, I'm anticipating further downside movement as part of this wave structure.
Ichimoku Cloud Analysis:
The price has decisively broken below the Ichimoku cloud, a strong bearish signal in Ichimoku trading strategies. The cloud has acted as resistance, and with the price now clearly below it, the bearish trend seems likely to continue. This breakdown is critical, as it aligns with the potential for further declines.
Volume Profile Insights:
The volume profile on the right side of the chart highlights key price levels with significant trading activity. These levels often act as strong support or resistance zones. The recent breach below a high-volume area suggests increased momentum on the downside. I’ll be watching these levels closely for potential reactions, but the current setup points to a continuation of the bearish trend.
Trading Rationale:
Given these technical factors, my outlook for USD/JPY remains bearish. The confluence of a completed Elliott Wave structure, the breakdown below the Ichimoku cloud, and the price moving through critical volume levels all support this perspective. I'm positioning to take advantage of this potential continuation of the downtrend, targeting key levels below as the market unfolds. As always, I'll be keeping a close eye on any signs of reversal, particularly if the price approaches major support zones or if the market sentiment shifts.
PJB
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