USD/JPY Price Swings and Waves Before US Elections

The USD/JPY is moving lower in a small downtrend channel. But the overall picture remains choppy and corrective.

This article will explain why the bulls have a decent chance of regaining control. Let’s review the key targets levels and invalidation zones before the U.S. Presidential elections.

Price Charts and Technical Analysis

The USD/JPY is testing a key support zone (blue box), which could provide a major bounce. There is also the support trend line (green) of the falling wedge chart pattern plus the Fibonacci levels.

A bullish breakout (green arrow) above the resistance trend line (red) of the wedge pattern could be the first signal of a reversal. This could indicate the end of the wave B (pink) and the start of the wave C (pink).

A break above the channel top (green check mark) could send price action towards the 50%, 61.8%, and 78.6% Fibonacci retracement level. A strong bearish bounce would confirm the wave D (purple).

On the 4 hour chart, there is a sign of 5 bullish waves (blue). This could indicate a first wave up (purple). It was also followed by a bearish ABC (blue) pattern, which did not break below the bottom of wave 1 (100% Fib).

A break below that bottom invalidates (red x) this wave outlook. A break (green checks) above the resistance (red) levels confirm the upside and the potential wave 3s. Of course, both a consolidation zone and volatility are possible before, during, and after the U.S. Presidential elections.

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

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