Overview: USD/JPY Supercycle-Degree Count
USD/JPY appears to form a Supercycle-degree downward impulse starting from 1976. While the FX market is fundamentally subject to constraints on long-term Elliott Wave application (→ Application Limits of Elliott Wave for FX and Commodities), in the USD/JPY case a clear long-term downward structure can be observed, making it a representative example where interpretation as a Supercycle-degree impulse holds.
The 1976 transition to the Jamaica Accord was the point when the complete shift from a fixed exchange rate system to a floating one was internationally established, and from that point on, USD/JPY formed a downward trend over approximately 35 years. We read this large wave structure from the Elliott Wave perspective.
Major Turning Points
Evidence That It Is an Impulse
The grounds that the sequence (I)–(V) is truly an impulse can be confirmed from three perspectives.
Detailed Points
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From the start of the floating exchange rate system (1976), the wave to which Elliott Wave can be applied is considered to have started
The complete floating exchange rate system was established with the Jamaica Accord transition in 1976. Prior to that, the fixed exchange rate system was in place, so the start of the USD/JPY count as a “market moved by market participants’ psychology” — to which Elliott Wave can be applied — is appropriately set at 1976.
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The sequence (I)–(V) forms a Supercycle-degree downward impulse (approximately 35 years)
The downward flow spanning approximately 35 years from 1976 to 2011 can be counted in a 5-wave structure of (I)·(II)·(III)·(IV)·(V). This corresponds to a downward impulse on the scale of Supercycle degree.
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Impulse evidence ①: All three major rules are satisfied
The three major rules for being an impulse (waves 1 and 4 do not overlap, wave 2 does not break below wave 1’s start, wave 3 is not the shortest) are all satisfied, clearing rule verification.
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Impulse evidence ②: Alternation can be confirmed at wave ② (zigzag-type corrective wave) and wave ④ (triangle)
Because waves ② and ④ take different wave forms (zigzag-type vs. triangle), they satisfy the alternation guideline (→ Alternation), and the high degree of fit with guidelines reinforces the reliability of the impulse interpretation.
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Impulse evidence ③: Wave ⑤ can be counted as an ending diagonal, and after completion there is a movement that rapidly retraces to the diagonal’s starting point
Wave ⑤ can be counted as an ending diagonal, and after its completion, the typical price action of rapidly retracing to the diagonal’s starting point is observed. This provides powerful grounds as a signal of wave completion.
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The Supercycle-degree downward impulse likely ended in October 2011 (75.5 yen)
Combining the above evidence, it can be judged that the Supercycle-degree downward impulse likely ended at the 75.5 yen low in October 2011. USD/JPY since then can be interpreted as being in a large upward wave correcting this downward impulse.
Related Terms
Summary
USD/JPY Elliott Wave Analysis is a long-term count case study using the 1976 transition to the Jamaica Accord as the starting point. The sequence (I)–(V) forms a Supercycle-degree downward impulse spanning approximately 35 years, and is analyzed as having likely completed at the 75.5 yen low in October 2011.
Three pieces of evidence — satisfaction of the three major rules, alternation between waves ② and ④, and wave ⑤ as an ending diagonal — reinforce this impulse interpretation. Amid the constraints on long-term Elliott Wave application in the FX market, USD/JPY can be regarded as a representative example where a clear long-term structure can be read.
