USD/JPY: Last 100 Days' Moon Shot Running Out Of Fuel

Elliott Wave Analysis of the USD/JPY Currency Pair by Sid from ElliottWavePredictions.com. Click on the chart twice to enlarge.

The wildly bullish talk regarding the USD/JPY currency pair appears to be well-founded from a supercycle point of view, but the moon-shot over the last 100 days has likely just about run out of rocket fuel.

The October 31 2011 all-time-low ended a 5-wave downward impulse that started all the way back in 1975, and finished with a terminal thrust from a 12-year-long wave-4 triangle (’95-’07). However, the initial up-move through March 15 2012 was very importantly a three-wave affair totalling 861.5 pips, and is therefore likely to be wave 1 (black) of a bullish leading diagonal. Wave 2 black to the downside was also a zigzag, traveling 704.9 pips ending September 13 2012. Now, wave 3 black has reached beyond the length that wave 1 black was, so the leading diagonal must be of the “expanding” variety, and not the more typical “contracting” type.

Since the diagonal is expanding, the imminent downside wave 4 must be longer than wave 2 was. If wave 3 black is complete, and all the proper subdivisions of a blue ABC appear to be in place, wave 4 must move more than 704.9 pips to the downside, to below 79.257 (if wave 3 black is complete) before wave 5 black ensues to the upside, eventually taking out the black 3 high.