TRADE: USDJPY: Sell@121.670 Cypher + Wave Count + Divergence

After a nice runup where I was able to bag +159 pips (see Related Ideas: "UPDATE #2: TRADE: USDJPY: BUY@120.460 Catching A Wave 3 Up? +159"), it could be now time for some kind of retrace. Will it be a BIG retrace? No. I don't think so. Let me explain my thinking:

WAVE COUNT
This pair has embarked on a 5- wave move higher. The ending of which could actually retest the highs in a wave (B). So if that is correct, then my job is to determine where prices could be in relation to the 5-wave move. What I see so far is that this pair has just started it's wave (3) with the waves (1) and (2) already completed. Within that wave (3), waves i and ii are done and the wave 1 of the wave iii has just completed. So what I am thinking is that the wave 2 of iii retracement is what it coming next. After which, a wave 3 of iii will develop. That is the true prize!

PATTERNS
There is now a small POTENTIAL Cypher that is developing. I'm not actually trading off the CD leg of this cypher but rather using it as a "trigger" to this SHORT trade.

There is also divergence on the 4HR TF as wel as overbought sentiment. Loss of momentum up and some bearish PA also contributes to this SHORT trade.

MY TRADE PLAN
I'm SHORTING this pair but I am not expecting a large retrace. By my wave count, this retrace should be limited to around the 120.450 level where I have the MAJOR SR Structure and that's where the wave (ii) is ended. So this retrace should not go below that area. If it does, then I have to rethink my wave counting. Stops gp above where I have labeled the end of wave 1 and the C point of the cypher. If this trade does not get underway much before the NFP, I will close the trade.

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*DISCLAIMER:
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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