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 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
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.