Elliott Wave Analysis: SP500 And USDJPY

By: Gregor Horvat | Mon, Nov 9, 2015
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I am looking across the FX USD pairs and searching for my favorite pair for USD opportunity. I came out with USDJPY. The first reason is because USDJPY is the strongest, and the second is correlation with the S&P500. As you know normally correlation between USDJPY and stocks is positive, but this has changed on Nov 3rd, when S&P500 turned down and is still weakening since then. However, we believe that reversal down on S&P500 is going to be corrective, which means that once the uptrend on stocks will resume USDJPY should become even stronger and rallied up to 124 if not 125.00. That said, USDJPY is on my radar screen for longs, but we need pullback on this pair for sure. For now that's not the case yet, but it can become very exciting if pair will make a three wave set-back to 122.80-123.00 area.

S&P500 vs USDJPY 4h

S&P500 vs USDJPY 4-Hour Chart

USDJPY, 1H

USDJPY 1-Hour Chart

 


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Gregor Horvat

Author: Gregor Horvat

Gregor Horvat
www.ew-forecast.com

Gregor Horvat

Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of www.ew-forecast.com, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on: SafeHaven.com, FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc. He recently won the award on FXStreet.com for Best Forex Analysis in 2016. At www.ew-forecast.com he helps clients and educate them about the Elliott wave prinicple and how to label and track unfolding patterns in real time.  His approach to the markets is mainly technical. He uses a lot of different methods when analyzing the markets such as candlestick patterns, MA, technical indicators etc. His specialty however is Elliott Wave Theory which could be very helpful especially if you know how to use it in combination with other tools/indicators.

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