UPDATE #1: QUICK ANALYSIS: USDJPY: Scenario #2: ABC 5-3-5 ZigZag

FX:USDJPY   U.S. Dollar / Japanese Yen
1263 4 13
Last week, i posted this chart about a bullish Scenario #2 for this pair I thought was a possibility. The recent price action has NOT invalidated this scenario and here I have updated it to reflect the latest changes. Here is the chart from last week's post so you can better see the changes I made:
With the recent decline in prices, I had to redraw the C point of the POTENTIAL bearish butterfly (purple) but it did not invalidate the pattern. In fact, with the establishment of this new C point that is right on the lower uptrending TL, it strengthens the possibility that prices may very well ascend along its' CD leg. The POTENTIAL bearish bat pattern is still valid and did not need any adjustments.

I've also updated the wave counts for this scenario to take into account the recent drop. I have now changed the recent drop to be an abc pattern with the leg a to be the small expanding triangle. This abc wave is the wave B (yellow highlighted) of the larger Wave (C). Wave (C) itself is a ABC 5-3-5 Zigzag with wave A (highlighted) being a 5=wave move and wave B being a 3-wave             move. That means that wave C of wave (C) MUST be a 5-wave             move. So in following that logic, the recent reverse from the end of wave B I've labeled as wave 1 of 5 of the wave (C).

Under this scenario, I will wait until I have seen the wave 2 of the 5-wave             wave (C) to be established before I look for a LONG position to take advantage of a possible wave 3. I will NOT take any LONG position until I see the wave 2 because when I see that, it will further strengthen the plausibility of this scenario. Furthermore, I'll need to see that the wave 2 retrace of the wave 1 DOES NOT break under the low of that wave 1 and therefore also break the lower TL before I can more safely say that my wave count is correct. If it happens that th             retrace of wave 1 DOES break below, then of course this scenario is in serious doubt and I will need to re-analyze it again before taking any action.

Please keep in mind that I am not giving any trading signals or trade calls here. Only providing my own trade thoughts for your benefit and insight as to my trading technique and style. Please don't ask if you should or should not take the trade or ask for stop loss and take profit levels. Any SL or TP given on my trades are my own I have used for my trade and are not recommendations for you to use. If you are not sure, then you do not have a trading plan for yourself in place. I suggest you make one before you continue to do any trading!

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Gorgeous chart, beautiful work. Thanks for telling me to steer clear of this baby.
EverythingForex grandmadollar
Thanks. But steering clear of it was not my intended message! Waiting patiently for price action to tell what to do and when to get in was the message as this pair has 2 ways to go that are both viable. Just need to be patient to find out which one....
grandmadollar EverythingForex
Patience is good. A break long would be easier to get involved with.
EverythingForex grandmadollar
Yep. I agree. The LONG trade would be favorable as personally, I favor the Scenario #2 and not the triangle. That's why I am holding off on trading this pair. Prices are too close to completing the triangle for me to be comfortable taking a LONG trade right now although that is my preference. But I am keeping all possibilities open. Should it go SHORT, I'll go with it despite my preferences. Just gotta be patient!
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