USDJPY Weekly The bigger picture - Large triangle or flat?
Updated
Looking at the bigger picture of this pair, assuming the rally from Oct-11 low to Jun-15 high was a wave A of larger degree, there are two scenarios that appear most probably for wave B, either a triangle (first chart) or a flat (in comments below). At this point both patterns are still in play, basically defined by how we count the rally from January low of this year. As usually is the case there are more than one count possible, until the wave is terminated with a confirmation in the other direct. Due to that we are looking at a weekly chart, that can still take some time. However, due to the contracting structure since the Jun-16 low, my first choice is the triangle, monitoring the other one as my Alternative count.
Starting the new week, there is no way to tell if we will go higher or lower to begin with, but for an optimal setup to the long side I'd prefer a retest of the support zone made up of the broken highs at 112.192 & 112.398, but if USD carries on from last week staying bullish off the blocks, then the low of 112.727 from last week may be all the retest we get. However, the weekly chart is not aimed to feel with that situation, which requires analysis on lower timeframes.
Starting the new week, there is no way to tell if we will go higher or lower to begin with, but for an optimal setup to the long side I'd prefer a retest of the support zone made up of the broken highs at 112.192 & 112.398, but if USD carries on from last week staying bullish off the blocks, then the low of 112.727 from last week may be all the retest we get. However, the weekly chart is not aimed to feel with that situation, which requires analysis on lower timeframes.
Note
Note
A Daily count detailing in a bit on the triangle scenario. While I would prefer a pullback to retest the broken highs from a structural perspective, I see less probability for this if just sticking with the count dynamics. In other words, wave 4 usually don't retrace more than 50% of wave 3, often only between 23.6 & 38.2, but as long as it doesn't overlap with wave 1 it's still valid. However, when this is the case (>50%) I tend to look for another more plausible count.Note
And this is an alternative Daily count I use for the flat scenario. Slight differences, but also of interest if to study how price will relate to the two pitchfork channels in the charts. Will they suppress price or will it break out of these channels? My take is that a break would indicate much higher prices, but I don't expect an immediate break out.Note
The Covid-19 Omicron (B.1.1.529) variant threw a wrench in to the works of market at the end of last week and it's still too early to say what kind of damage it has caused to the longer term picture. From the information that has come through over the weekend it appears as if we have had a risk-off overreaction, once again. The move in the Euro across the markets was very suspicious in my view and I expect much of it, if not all and potentially more, will be retracted. Maybe the coming week already. In any way, I like to see more data as the week takes off before I make updates to my charts, but cautiously I think this can be a buying opportunity. In fact, if Omicron competes out Delta and proves to present much milder symptoms, resulting in less hospitalizations and decreasing death figures then we may be in for an even stronger risk-on move going forward. However, it's early days yet so let's wait for the data.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.