ciano1993
Long

Possible Wave 5 to follow completion of Wave 4 (ZigZag)

FX:USDJPY   U.S. Dollar / Japanese Yen
It appears 5 subwaves of a wave C in a ZigZag have completed. It looks like this ZigZag may be the full corrective move of wave 4 since it has reached a price level between the .382 and .500 fib retracement of wave 3, it is also in correct proportion to wave 2. The RSI indicator supports my prediction that wave 4 has ended. RSI Range Rules say that in an up-trending market RSI will typically fall back to the 50-40 zone in a corrective move and bounce up at its completion. The Stochastic is also showing oversold conditions.

Entry:
I will take an aggressive entry on my demo account once the extreme of wave 4 of wave C of the ZigZag is broken.

Stop Loss:
Just below the extreme of wave C.

Target:
My system says pattern over hard take profit targets so I will wait for a 5 wave impulse to complete while managing the trade along the way (Lessen Risk -> Eliminate Risk -> Protect Open Profits). As a guideline wave 5 could possibly end around the line drawn from the extreme of wave 1, parallel to a line connecting the extreme of waves 2 and 4, normally this parallel line would be drawn from the extreme of wave 3 but if wave 3 shows a nearly vertical rise or decline it can be drawn from wave 1 instead. The other 3 targets are based on wave 5 being equal to wave 1 since wave 3 extended, being equal to a .328 multiple of the net distance of wave 1 through 3 and being equal to a .618 multiple of the net distance of wave 1 through 3. All of these are common fib multiples for wave 5 in an impulse.

Note: The substructure of waves A,B and C was determined on an hourly chart which is why it looks a bit off on the Daily.
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