USDJPY – Down Wave Analysis Following the bullish engulfing candle witnessed on Feb 14th 2017, the US Dollar spiked to the upper side but is currently retracing to the lower side. We expect the current bearish price rally to be the unfolding of the corrective wave (b) and should not go beyond 113.28 from where we’ll be looking to buy the impulsive wave (c) towards 115.30 and possibly higher to 117.07. This view can only be invalidated in case the pair end up below 113.20, if this is the case, then an acceleration towards 111 is inevitable. Expect a similar price action CADJPY, CHFJPY, GBPJPY and HKD. These pairs have a strong positive correlation of up to +91 and will have a similar price action during this intraday. Trade Recommendations: Remain short but only up 113.28. Alternatively, you could wait for a clear rebound from 113.28 to go long with an ideal first target at 115.30 and the next target at 117.07.
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