Comments from ECB chief Mario Draghi sent the euro down half a percent to less than $1.07 on Friday after two days of gains which dealers now put down to a trimming of trading positions by a handful of major investors.
The best reading of the current Elliott Wave cycle in the CAD/JPY currency pair suggests there are 5 swings from wave (X) low at 10/28 and another swing higher is ideal to complete a 7 swing structure as far as 92.12 pivot stays intact.
The decline from 125.80 to 116.15 in the USD/JPY currency pair is in three waves with first minor three subwaves in A, so we think that pullback from the last few months was nothing else than just another correction within ongoing uptrend that is in play already since 2012.
For USD/JPY traders, it’s been a particularly trying two and a half months. Since late August, the pair has carved out a tight 300-pip range between 118.50 and 121.50, never closing beyond this zone despite central bank decisions on both sides of the Pacific, a series of disappointing U.S. jobs reports, and a raft of other economic data.
The Fed Open Market Committee will meet this week to discuss monetary policy and the possibility of the first U.S. rate hike in years. With dovish sentiment dominating the global dialogue of central banks, keep an eye on additional policy meetings from Sweden's Riksbank, the Reserve Bank of New Zealand and the Bank of Japan.