USD/JPY Elliot and Fibo Analysis

While recent declines in commodities and oil bode well for Japanese exports, internal troubles cannot keep the BOJ from easing monetary policy further. Many speculate that this may come as early as the next meeting in January. Additionally, oil has put pressure on the USD, although this will have little effect on US output and a positive effect on consumer spending as seen from today's Consumer Sentiment numbers. This boils down to a long term positive view on the USD and a negative view on the JPY. Unless the somewhat sinister drop in oil turns out to be something fundamentally wrong with the global economy, then I remain bullish on the pair.

This fundamental view supports this technicians view. The top this week completes the 3rd wave of a long term upward trend that is aiming at 140.