Based on the article written by Ivan Labrie and published at EWM Interactive titled “Elliott Wave Analysis of USDJPY as of September 1st, 2025”, the following is a rewritten, expanded version of the content, maintaining the essence and structure while elaborating for clarity and completeness.
Elliott Wave Analysis of USDJPY – September 1st, 2025
Author: Ivan Labrie (original analysis at EWM Interactive)
The USDJPY has been a focal point of attention for technical traders and investors throughout 2025. With the yen displaying periodic strength against a generally bullish U.S. Dollar index, discerning the medium- and long-term trends requires more than simple support-and-resistance tracking. Elliott Wave Theory provides a methodical approach to chart and project market patterns based on crowd psychology manifested in price structure. As of September 1st, 2025, the Elliott Wave count offers valuable insights into the likely dynamics to expect in USDJPY.
Summary of Key Points:
– The USDJPY has exhibited signs of a completed upward impulse wave
– A downward corrective phase is likely underway
– Support levels based on Fibonacci retracements and wave structure are being tested
– Bearish potential exists for weeks ahead if key resistance areas hold
Macro Context:
To understand where USDJPY stands, it is vital to briefly examine the macro context since the end of 2024.
– The U.S. Federal Reserve has maintained relatively high interest rates throughout 2024 and early 2025 to tame inflation
– The Bank of Japan has remained largely dovish but has started to hint at tightening due to domestic inflationary pressures
– These opposing policies have created bursts of volatility in USDJPY, particularly when investors shift expectations about yield spreads
Given this backdrop, the Elliott Wave Framework allows us to focus on the behavior of the market participants via recognizable wave formations.
Long-Term Elliott Wave Count:
The larger picture for USDJPY suggests that the pair completed a five-wave impulsive structure originating from the March 2020 lows.
– Wave 1: Started from the pandemic crisis lows, representing the initial recovery phase for USDJPY
– Wave 2: A corrective pullback that respected Fibonacci support, ending in early 2021
– Wave 3: A powerful upward movement as the Fed started raising interest rates and the BOJ stayed dovish. This extended wave was the strongest
– Wave 4: A sideways consolidation that spanned most of mid-2023
– Wave 5: Final peak reached in mid-2025, where price action started showing signs of exhaustion
The fifth wave appears to have completed in a typical ending diagonal formation, characterized by overlapping wave segments and reduced momentum. This is commonly a signal of a reversal or deep correction approaching.
Current Position and Short-Term Structure:
As of September 1st, 2025, the USDJPY has likely entered a corrective phase, specifically:
– A double zig-zag correction (W)-(X)-(Y) structure appears to be developing
– Wave (W): The first sharp leg down from the peak, confirming the exhaustion of buying momentum
– Wave (X): A counter-trend rally that could mislead market participants into believing a new high is forthcoming
– Wave (Y): The anticipated continuation of the bearish corrective structure targeting key retracement levels
Wave (X) might currently be unfolding, suggesting that a temporary bounce can continue, but the larger trend from here is likely bearish once (X) finishes.
Expectations Moving Forward in Q4 2025:
Given the structure of the pattern so far, the following developments are expected:
– If wave (X) completes below 151.50 (a common retracement for wave (X)), the pair could start wave (Y) down
– Support targets for wave (Y) would include:
– 145.00: Former support zone and psychological level
– 141.75: Corresponding
Explore this further here: USD/JPY trading.