USDJPY

Has the Japanese yen started the next major move in its long-term path that was imagined by the central bank in 2012? The 3 arrows strategy involved weakening the currency to stimulate the economy. After that initial move into the 2015 top, the USDJPY has been forming a triangle for many years and it's been a long wait to see it complete. The most recent rally in the currency pair appears like an impulsive wave on the upside that might mean the start of wave C long-term.

What this means in simple language is that USDJPY has started a move towards 170 over the next few years. This inside a dollar bear market may appear surprising but could actually be bullish for Japanese stocks. If prices break out on a sustainable basis above 110.50 then we can anticipate a series of impulsive rallies over the next few years. Right now we may have completed wave 1 of this advance and wave 2 could pullback to 61.8% of wave 1 which comes in at 105.75