Title: Elliott Wave Analysis of USDJPY – Forecast Update for August 4th, 2025
Original Analysis by EWMinteractive
Adaptation and Expansion by [Your Name]
The USDJPY currency pair has long been one of the most widely followed Forex pairs due to its sensitivity to monetary policy shifts, geopolitical uncertainty, and general risk sentiment. As of early August 2025, significant developments have emerged in the USDJPY price structure, prompting a closer examination using the Elliott Wave Principle. EWMinteractive provided a detailed wave-based outlook, which we will expand and analyze further to offer a comprehensive perspective on what may lie ahead for the USDJPY.
This wave-based analysis aims to not only interpret the current price action but also to forecast potential movement scenarios using the Elliott Wave framework. Here’s an updated breakdown of the current USDJPY structure, recent market behavior, and considerations for future price direction, based on the original insights from EWMinteractive.
Overview of Recent Market Behavior
Before diving into wave counts and projections, it’s essential to contextualize the recent market behavior:
– USDJPY has experienced notable volatility in 2025, driven by:
– Diverging interest rate policy between the Federal Reserve and the Bank of Japan.
– Varying global inflation pressures.
– Renewed investor appetite for risk, alternating with brief episodes of flight-to-safety strategies.
– From a technical perspective, USDJPY has shown signs of a larger degree correction, possibly entering the final stages of an Elliott Wave cycle.
– Key resistance and support zones have shifted, signaling increased participation from both institutional traders and retail speculators.
The Elliott Wave Perspective: Larger Time Frame
The Elliott Wave Principle, developed by Ralph Nelson Elliott in the 1930s, posits that markets move in repetitive cycles based on investor psychology. A complete Elliott Wave cycle consists of five waves in the direction of the main trend, followed by three corrective waves against that trend, forming an 5-3 wave structure.
According to the original EWMinteractive analysis from August 4th, 2025:
– The rally in USDJPY since its low in 2023 resembles an impulsive five-wave structure, suggesting that it may represent a motive wave within a larger bullish sequence.
– The decline that followed into mid-2024 appears to be a three-wave correction (labelled as A-B-C), which fits the Elliott Wave criteria for a standard flat or zigzag pattern.
– The rebound from late 2024 into 2025 seems to mark the beginning of another bullish motive wave.
Wave Count Breakdown
Let’s look at the current USDJPY Elliott Wave count as interpreted by EWMinteractive and expanded here for clarity:
1. Primary Wave I:
– Started in early 2023 following a significant low in USDJPY.
– Extended strongly through much of 2023, forming five impulsive sub-waves.
– Marked by increasing investor confidence in U.S. economic recovery and Fed tightening policy.
2. Primary Wave II:
– Unfolded as an A-B-C corrective decline throughout 2024.
– Subdivisions of each leg:
– Wave A: A steep, initial decline on weakening dollar sentiment.
– Wave B: A brief retracement rally as buyers attempted to regain control.
– Wave C: Final leg down, completing the correction, coinciding with renewed BOJ intervention rumors.
3. Primary Wave III (in progress):
– Began in early 2025, likely targeting a new high beyond the termination point of Wave I.
– This wave is key, as it typically extends the furthest in both time and price within an impulsive five-wave cycle.
– Within Primary III, the sub-wave structure appears to be forming as follows:
– Wave 1: Strong initial thrust upward.
– Wave 2: Shallow pullback, indicating bullish conviction.
– Wave
Explore this further here: USD/JPY trading.