We have seen a move up in US notes on Friday after the NFP report which could provided important information for the USD pairs this week. As you know when US notes will rally, yields will fall which will cause a downside pressure on stocks. At the same time this is a good news for JPY, meaning bearish for USDJPY.
On the chart below of US notes we anticipate a reversal up after a wave (E) down to a trendline support where wave B triangle may already be finished. However, we still need that 125 break to support a bullish view for wave C rally up to 128’00.
10 year US notes Daily Elliott Wave Analysis
If notes will rally, yields will fall so our interest for a trade set-up will be in USDJPY. Traders that follow our forecast regularly will know that we are observing a bearish triangle on USDJPY, therefore we think that the current intraday gains will be limited in wave C) that is part of a triangle. Based on intraday price action, we could be considering shorts but after a completed five wave rally. In other words, we want to see a bearish impulse from a new high, as fifth wave is still missing.
USDJPY 1h Elliott Wave Analysis
