Elliott Wave Update: Stocks, XXX/JPY Pairs Set to go Bullishly Big
|Good day everyone, and welcome back to the US sessions updates. Today is Independence Day, so markets are not moving with their usual pace.
First, let us check the stock market, and its positive correlation with the xxx/JPY pairs. Stocks are bullish, and if we look particularly at Nikkei225, we can see its connection with the USDJPY, and its bullish outlook.
Nikkei225 is trading in a bullish trend, up from June lows, with a third leg of a higher degree in progress. After a three-wave corrective drop from near the 21650 region, we can see that price made an impulsive recovery, however not in five legs yet, so gains are still expected. We are tracking a breakout of a corrective channel for a previous wave iv, that points towards 21940/22000 region.
USDJPY recently completed a sharp three-wave a-b-c correction within a wave 2 of a higher degree near the 107.55 region, where former swing low offered support. Also, the Fibonacci ratios of 50.0 and 61.8 played as support and turning point areas and pushed price into a potential, minimum three-wave recovery. A further rally above the 108.21 level would confirm a completed wave 2, and a bullish continuation.
Nikkei225 vs USDJPY, 1h
Nikkei225, 1h
USDJPY, 1h
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