USD/JPY – Monthly Analysis
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CANDLES
After four months of weakness, the USD has awakened and is steadily building bullish momentum against the Yen. So far, the Greenback has delivered strong bullish moves across multiple time frames, up to and including the 8-day frame, which it completed with a bullish engulfing candle.
Technically, the current momentum closely resembles the setup seen in September 2024, which preceded a roughly 13% rally in USD/JPY.
Notably, on the very long-term chart, the annual candle recently backtested the 50-year moving average—potentially establishing a strong foundation for a multi-year advance in the Greenback.
ELLIOTT WAVES
The long-term targets for the USD/JPY pair remain intact.
Summary
The USD/JPY pair appears to be forming a solid mid- to long-term bottom, supported by a combination of bullish candlestick formations and strengthening technical indicators. Recent price action suggests the emergence of a sustainable upward trend, with growing momentum across key time frames.
Candles across the weekly, 8D, and monthly frames are aligning in favor of the U.S. Dollar, and momentum indicators are increasingly supportive of a continued advance. The setup points to the potential for double-digit gains in favor of USD holders if the current structure holds.
On the other side of the equation, the Japanese Yen continues to show signs of structural weakness and long-term depreciation. This persistent divergence in strength reinforces a favorable outlook for the USD/JPY pair, with the potential for a sustained uptrend that could extend over the coming quarters or even years.
Happy Trading!
