I am observing that today's weakening of the US dollar did not significantly impact the USD/JPY pair's bottom line on the daily chart, and I can see we are forming a daily doji candlestick with identical shadows. I interpret this specific price action as highly meaningful for my technical analysis. I believe that if this candlestick persists until the end of the current trading session, it signifies, to a large extent, a state of market indecision about the pair's near-term outlook. I understand that this pattern illustrates a precise equilibrium where both sellers and buyers are equally focused and forceful, resulting in an opening and closing price that are virtually identical. I am considering that such a formation, especially following a recent move, often acts as a potential reversal signal or a pause before the next significant directional commitment. I am, however, cautious about drawing immediate conclusions from a single candlestick, so I insist on waiting for the session's close to confirm its validity before I incorporate it fully into my trading thesis
From my analytical perspective, particularly through the lens of Elliott Wave theory, I still expect the pair to ultimately resume its decline. I am basing this expectation on my current count of the wave structure, which suggests that a corrective downward phase is due or ongoing. However, I recognize that to confirm this bearish scenario decisively, I need to see the pair's quotes break out definitively from the current extended consolidation channel and move sustainably south. I am noting that for now, despite the pair's local decline, its broader ascending structure on a higher time frame remains technically intact from my point of view. I see that the higher highs and higher lows have not yet been fully invalidated. Therefore, I must acknowledge that considerable upside potential remains if the doji marks a consolidation before a continuation upward. I am prepared for the possibility that if the price breaks upward from this equilibrium, I would be forced to revise my entire wave count for the asset's current ascending formation. I am maintaining a disciplined approach, where I will wait for price action to confirm the breakout from this indecision before I commit to a firm directional bias, as I understand that my primary role is to follow the market's lead rather than impose my expectations upon it prematurely.
