USDJPY 1H Chart – April 15, 2016
As seen from the chart above, USDJPY has a completed A-B-C structure that suggest lower levels are to be seen in the coming days.
In our previous post, USDJPY: Quick Update, we expected a wave 4 to happen and the target for major wave 3 would be the 162% extension level.
Apparently, that target was met sooner than we expected making our previous count completed and a possible fast sell-off might start today as the wave 1 of a new 5-waves down targeting new lows.
We are short at current market levels, 109.40 and 109.55 with stop-loss 109.80. Since this is the last wave down, it would be difficult to determine its structure and it might be either a fast sell-off or an Ending Diagonal structure.
We are waiting to see how price will react at 108.30, which is an important support level, to determine whether to lighten our short position or to adjust our stop-loss.
Read this post, USD/JPY (Long Setup): Wave count updated, how to play the recovery, where we started calling for a potential long setup to play a big wave 4 towards the 38% retracement level. Now USDJPY has nearly hit that wave C of 4 target (38%) at 110.05.