Checking in on the yen again: bearish cross in $XJY focuses attention on possible lower levels for this yen pair

It's been a while since I reviewed the yen via the $XJY chart so let's take a look. (I use the $XJY chart mainly because it's easy to track and the FXY exchange-traded fund plays off this pair.) After it fell out of the triangle "trap" early this year, it looks like it may have completed 5 waves down into the April low. At that point it may have looked a little like a triangle pattern was developing, and theoretically perhaps so except that it looks like it's grown too large to still be in a triangle pattern. Another way that may be more "fitting" in Elliott Wave terms, is to see that it finished 5 waves down into early April and then went into a zigzag ABC upward. There could be a bullish way that a zigzag like that could lead on up to new highs in $XJY. An even more bullish read would be that the 5 waves down completed a large expanded flat's C wave (the hypothesis that led me to predicting the area where it would bottom on that drop - which it poked under but has since continued to respect). In that case the waves up can even be considered a couple of first waves. Even without intepreting wave counts, it's bullish that it bounced above its 200-day moving average again. Staying above that, or at least staying above the early May lows (and especially the early April lows!) obviously would help.

The 200-day moving average is still slightly uptrending which is helpful to the bullish case for $XJY. There's actually room that it could fall lower down on my monthly chart (at bottom) and still be within an uptrend channel, although losing channel support would point to a level like $83 and then possibly lower. However, that pattern on the monthly chart doesn't really have internal subwaves that look like zigzags required for a valid triangle. This is one of the reasons that I've become pessimistic that $XJY will thrust higher to those targets I once annotated onto that monthly chart. Its failure from that "triangle trap" was also a failure at the Fibonacci .786 retracement to the 1995 high. That means it can be a bearish Gartley pattern that could be a "B" wave in Elliott Wave terms. The daily chart looks a little "heavy" to me.

Using "head and shoulders" terminology, that last rally it had might have been all it could do with a reverse head and shoulders, and it may be in danger of tracing out a standard (bearish) head and shoulders pattern now. Earlier I mentioned the 200-day moving average. Well there's another concerning factor, and that is that the 50-day moving average has dropped to the point that it's already crossed under the 200-day moving average, and it's now starting to point lower from it. That's quite a bearish signal and it may be enough to pull the $XJY to much lower levels.

Therefore I'm now looking more closely at lower targets such as 93, and 83 again, although a drop out of the monthly chart's channel would make me wonder if it's already in a "C" wave down that's of a magnitude with the large movements on the monthly chart. If that first drop down into April was a C-wave's first wave, with the recent ABC type movement its second wave, then I'll want to be positioned accordingly if it's going into a C-wave's third wave down!

*Update at 5:43 pm - I am adding below, the charts of Tony Caldaro for the yen (daily and weekly) at his Elliott Wave Lives On site (included in the "other sites of interest" at the right side of the page here) (daily and weekly). These show annotations for the yen uptrending, which is what I have generally leaned toward also. Perhaps this bearish cross of the 50 under the 20, and accompanying signs of weakness, would not rule out the yen remaining in a bigger uptrend on the big-picture charts. It looks like Tony's Objective Elliott Wave count would agree that the yen must remain above the April lows in order to maintain the more bullish count.