FXY (Japanese Yen ETF): Bullish Setup

By: TheWaveTrading | Tue, Feb 25, 2014
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Reason:

If we consider USDJPY as a proxy for the Yen we can see in the daily chart below that it is highly probable that from the January 2 high price should unfold a Zig Zag down. The rebound from the February 4 lod is clearly corrective (Maybe it could be forming a Bearish Flag) fulfilling the proper structure of a countertrend wave (B).

We can locate the potential target for the assumed wave (B) in the range 103 - 103.64 although probably it should stall at the 50 dma, which stands at 103.50.

The Bollinger bands are tightening suggesting that a large move is coming.

USD/JPY Daily Chart
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If USDJPY has a pending wave (C) down FXY should do the opposite with a wave (C) up, hence I am watching if with a falling wedge price completes the wave (B) which would open the door to the kickoff of the assumed wave (C) up with a theoretical target in the area of 99.

FXY Daily Chart
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TheWaveTrading

Author: TheWaveTrading

TheWaveTrading

Contact: If you would like to contact the author, you can e-mail him at thewavetrading@gmail.com

The main objective of this project is to share my views on several markets and asset classes.

In the initial stage TWT website will be a free service.

My main focus will be the equity market with SPX being the leader but I will also follow US equity sectors, major European indices, fixed income, currencies and commodities markets.

My analysis is based upon traditional Technical Analysis, Elliot Wave guidelines and investor sentiment.

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