USDJPY Finalizes Triangle - Bearish Against 121.30

FX:USDJPY   U.S. Dollar / Japanese Yen
1336 6 22
The Elliott Wave picture on the USDJPY             is slowly clearing up.

It appears the Elliott Wave triangle terminated on Sept 25. It is common to see the 'e' wave of the triangle break the a-c line (the red line) while holding below the wave 'c' extreme. Subsequent that rejection, we have a 5 wave sell off that cleanly matches up and holds many wave relationships of an impulse.

Wave 3 terminated near the 1.618 distance of wave 1
Wave 5 terminated near the equality measure of wave 1
Wave 5 terminated near the .382 length of wave 1-3
Wave 5 terminated near the parallel to the 2-4 price channel

The move since the Sept 29 low is clearly corrective. I'm showing a confluence of wave measurements coming into play at 120.40-120.50. (if prices don't make it to the reversal zone, consider a break of the grey trend line connecting both Sept 29 lows)

Therefore, we'll look to short into that price zone with 121.30 as the stop loss.

First target is near 118.50 so we should be comfortably better than a 1:2 risk to reward ratio.

Additional targets exist down near 115.
last wave that start to 119,24 can be impulsife if it will extent this action can be overlaps
my idea
have been watching this triangle quite some time too, maybe today is a key reversal.
Hi Colin - maybe so. We can at least identify an area to place the risk which would invalidate the analysis.
+2 Reply
just shorted it after ADP.
Thanks. I think USDJPY will break the bottom red support you drew soon. Maybe on the next hit.
Hi Davblitz - if the pattern plays out, we would anticipate a break below the red line. Elliott Wave analysis is probabilistic, so we never know for sure what the pattern is until after its done. However, based on the triangle and how the triangle terminated, it looks like more downside is coming.
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