USDJPY Could Rally While 10 Year US Treasuries Are Moving Lower – Elliott Wave

USDJPY-Elliott-Wave-Analysis

USDJPY 4h Elliott Wave
US Bonds were trading lower in the last two sessions after the minutes of the Federal Reserve showed that most policymakers still favor a tapering program this year. But sell-off on bonds came on news that QE could end in mid-2014. USD was firstly down on the news, but then it recovered during the Asian trading hour. However, EURUSD is again finding some bid, so no real direction at the moment. Meanwhile the S&P Futures are rallying.
I am looking at the 10-year US notes where I suspect that prices are moving lower into wave B that is part of a larger three wave rally on a daily chart. Wave B could reach levels around 124-124.50 so there is room for more weakness. If weakness will resume, then US yields will rally which will support the USDJPY.

On USDJPY I can see some reversal to the upside but still need to wait more, especially if we also consider that on 4h chart price is now testing upper trend line of a downward channel. We definitely want to see a breakout here to confirm bullish waves.

Gregor Horvat, based in Slovenia, has been in the forex markets since 2003. He is a technical analyst and individual trader who has worked for Capital Forex Group and TheLFB.com. He also is founder of forex services on www.ew-forecast.com. EW-Forecast.com provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). Website: http://www.ew-forecast.com