In our previous week’s post, we alerted for a major buy trade that would target above 110.50 – USD/JPY: Retraced 38.2%, Time to Buy Already?

Since that moment, USDJPY has moved up in a strong wave 3 and currently is completing an inner wave 4.

USDJPY 1H Chart- April 24, 2016

USDJPY 1H - April 24, 2016

USDJPY has made an extended structure and we believe that wave 3 might send prices above 112.00.

In the chart below, we try to count the green wave 3 and the fact that the yellow count has not completed yet, made us extend the target for 112.50.

USDJPY 1H Chart – April 25, 2016

USDJPY 1H - April 25, 2016

A move deeper than 110.40 would put a question to this structure and even though the current price action in USDJPY favors the bears, going short in a wave 3 is simply devastating.

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