Wave Analysis:

During yesterday’s trading session the USD/JPY pair managed to finish movement in the range. By the end of the trading session the pair had added 100 basis points and reached the level of 80.30. Thus, it is likely that USD/JPY is forming inner wave structure of a new wave 5 in terms of its uptrend, which starts from low of October 13. If it is so, then targets for wave 3 (in the 5th) may be placed a little higher than the level of 80.50.

Targets for Up Wave 5:

80.30 – 11.4% of Fibonacci
80.67 – the high of wave 3 of c

Targets for Down Wave:

79.90 – 23.6% of Fibonacci
79.43 – 38.2% of Fibonacci

Summary and Trading Recommendations:

At the moment we can conclude that an up wave presumably of the 5 uptrend started its formation. The quotes growth may continue towards the level of 80.30 and 80.67, which is corresponding to 11.4% of Fibonacci and the high of wave 3. If wave 3 in 5 is completed, then a short down wave 4 in 5 with targets at 79.90 and 79.43, which is corresponding to 23.6% and 38.2% of Fibonacci, may start building. Neither Divergence/Convergence of MACD nor channel are observed at the moment. There is a strong likelihood that wave 5 of an uptrend will be built.