Japanese Yen 4th Wave Low at 120.85?

Commentary: We asked yesterday - is this the turn? Well?apparently not. The reversal from 120.85 gives scope to a new high in a 5th wave. We warned yesterday that “very short term intraday charts fail to show impulsive downside action and the decline from 121.86 is corrective so far and in a-b-c format”, so this rally is not unexpected.

We would be confident in the bear side on a break below the potential support line drawn off of 117.60 and 119.46. That line is near 120.62 currently and increases about 12 pips per day (see chart above). Potential resistance is at the line drawn off of the 5/4 and 5/23 highs near 122.10 (increases about 18 pips per day). In summary, we expect a new high (above 121.86) followed by a reversal. Another scenario is that a more complex correction is unfolding from 121.86. In this case, a c wave decline would come under 120.85 before an attempt at 121.86 Strategy: None