The USDJPY is approaching 93.50…a break below there would completely clear the head and shoulders top that has formed since March. The triangle count that I have presented in recent days is still valid but becoming less probable by the day. At this point, remaining below 96.71 keeps the near term trend pointed down.
Big picture, there are 5 waves up from the 2007 low of .9050. The decline from 1.3068 is the correction (either a b wave of a 2nd wave) of that advance. The first level of potential support is the former 4th wave extreme at 1.1459. Fibonacci support is then at 1.1060 and 1.0590. I wrote yesterday that “a drop below 1.1475 could complete a double zigzag (7 waves). The new low would create divergence with RSI as well so a low and reversal is possible within the next several days.” Although there is not enough evidence to suggest that a low is in place yet, strength is what I am looking for. If near term structure confirms a low (5 waves up), then I’ll turn bullish.
Whereas the EURUSD has yet to exceed its March high of 1.3742, the USDCHF has already dropped below its March low of 1.1157. In other words, minimum expectations have been met for wave Y. One more low could complete 5 waves down from 1.1265 and give way to a bottom and reversal. A rally above 1.1087 would suggest that a low is already in place.
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