Title: Elliott Wave Perspective: USDJPY Outlook Based on July 14, 2025 Analysis
Based on the original analysis by Ivan Hoffman — EWM Interactive
Source: Elliott Wave Analysis of USDJPY — July 14th, 2025
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The USDJPY currency pair has been exhibiting critical behavior patterns suggestive of a trend-defining moment, as interpreted through the lens of Elliott Wave Theory. The recent gains since May 2025 have attracted attention as the pair came close to surpassing the 162.00 resistance zone. However, a deeper technical examination reveals that what may initially appear as a bullish breakout could, in fact, represent the final stages of a much larger corrective structure.
Ivan Hoffman of EWM Interactive presents a contrarian view on the direction of USDJPY, suggesting that the upward swing is not the beginning of a major bullish trend but rather the tail end of a complex correction. Below is a comprehensive interpretation and extension of his original insight, further unpacking the long-term implications and current technical setup for the US dollar against the Japanese yen.
General Context and Structure
– Elliott Wave Theory divides market behavior into impulsive (motive) waves and corrective waves.
– An impulsive wave consists of five sub-waves that appear in trending markets.
– Corrective waves typically move against the prevailing trend and are often divided into three main structures: zigzags (A-B-C), flats, and triangles.
– In this scenario, the recent price action of USDJPY is not aligned with impulsive traits but rather fits the mold of a terminal corrective pattern—something often seen at the exhaustion phase of price rallies.
The Larger Degree Wave Count
According to the latest visual wave count illustration presented by Ivan Hoffman, the long-term price activity of the USDJPY pair marks the development of a W-X-Y double zigzag correction—not an impulsive uptrend, as many market participants may believe. Here’s how the broader wave sequence unfolds:
– The upward climbing leg from the lows of 2020 has extended into what appears to be a deceptive bullish pattern.
– Upon deeper scrutiny, this post-2020 rally seems to fit into the structure of a corrective W-X-Y setup:
– Wave W completed near mid-2022.
– A corrective Wave X descended later in the same year.
– The final portion, Wave Y, is now likely ending with the most recent upward burst seen in mid-2025.
Key Traits of the Terminal Wave Y
Wave Y, which is responsible for the recent rise in price, has developed noticeable characteristics of a five-wave corrective sequence within itself—a behavior that points to a diagonal structure. This is critically important, as leading or ending diagonals typically occur at the beginning or end of market phases.
Important points related to this diagonal:
– The wave subdivides as a 3-3-3-3-3 or 5-3-5-3-5 pattern.
– Wave Y, and particularly its fifth sub-wave, seems to be approaching completion.
– This terminal-looking advance could soon reverse sharply if the wave structure indeed concludes at this price level.
Why It Matters: Technical and Psychological Traps
Many chart watchers and algorithmic strategies interpret fresh highs as breakout signals. While this works well in trending markets, Elliotticians caution that not all breakouts lead to sustainable trends. In the USDJPY case:
– Breaking above previous highs near 151.90 (resistance from late 2022) has triggered bullish sentiment.
– However, Elliott Wave practitioners see the pattern as being near exhaustion, not in continuation.
– If the Y wave completes soon, the pair may face abrupt downside risk, possibly shocking those who have chased the breakout expecting continuation.
Potential for a Bearish Reversal
Several technical factors suggest the probability of a bearish reversal in the coming sessions or weeks:
– Fibonnaci Projection: The latest move aligns closely with the 100% Fibonacci extension from the W-X legs, providing a
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