JPY/USD Forecast – Elliott Wave, Interest Rates & AI Growth

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JPY/USD Forecast – Elliott Wave, Interest Rates & AI Growth - AI Generated content from my own views. Not financial advice
Fundamental Analysis – Interest Rates & AI Impact
📌 Bank of Japan (BOJ) Interest Rate Shift

Japan has raised interest rates for the first time in years, signaling a shift from its ultra-loose monetary policy.
This break from negative/near-zero rates has strengthened the yen as Japanese government bond yields rise.
The rate hike reduces the carry trade appeal of JPY and may lead to further capital inflows into Japan.
📌 Japan’s AI-driven Growth Potential

The Japanese AI market is booming, with projections to reach $26.8 billion by 2030, growing at a 23.3% CAGR.
Major corporations like SoftBank and OpenAI are driving AI adoption, which could boost productivity and long-term economic strength.
If Japan sustains this AI-driven innovation, it could support a stronger yen over time.

Technical Analysis – Elliott Wave & RSI Divergence
Elliott Wave Structure
🔹 Initial 12345 Uptrend Completed ✅
🔹 ABC Correction in Progress – We likely completed the 12345 wave down, forming an ABC correction at the bottom.

RSI Divergence – Monthly Timeframe
📊 Bullish Divergence Forming

Price has made lower lows 📉
RSI is making higher lows 📈
This is a strong reversal signal, indicating downtrend exhaustion and a potential shift to an uptrend.
Key Levels & Fibonacci Zones to Watch
🔹 61.8% Fib Level – This level is a critical decision point; breaking it confirms the trend reversal.
🔹 1.618 Overextended Fib – If the 61.8% level is broken, the next 1.618 fib target comes into play, driving further upside momentum.

📌 Trendline Consideration

If the B leg touches the trendline, expect strong upwards momentum, but breaking it could lead to a continued down trend.
Final Outlook – What’s Next for JPY/USD?
📈 If a new 12345 impulse wave starts, expect:

Wave 3 to be the strongest leg, surpassing Wave 1.
Waves 2 & 4 to be corrective patterns (zig-zags, WXYs, etc.).
📉 If B leg fails and price breaks below recent lows, expect further bearish continuation before reversal.

🚀 Watch for confirmation on RSI and trendlines to determine the next major move.

Conclusion – Yen Strength Incoming?
With the BOJ raising rates for the first time in years and Japan’s AI sector booming, the long-term fundamentals favor a stronger JPY.
Technically, the ABC correction may be ending, and a new uptrend could be forming based on RSI divergence and Elliott Wave structure.
บันทึก
I suspect this could be the ABC forming , we are unsure how deep the B leg could go
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