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USDJPY has turned nicely down at the start of the year from 105.50. A decline can be counted in five waves in the shape of a leading diagonal, so we think that this is the first leg of a minimum three waves bearish structure.

Therefore we expect a decline through 100.72 and extensions beneath the 100 psychological level, but just not yet. Notice that in mid-May the market bounced from the 100.80 level after only three legs down from above 104.

A three wave structure is a correction so it seems that the decline was just part of a bigger and complex corrective wave (B) that can be a triangle if we consider latest three wave rise up in wave C that appears complete, so the current leg down is wave D).

USDJPY Daily Elliott Wave Analysis

usdjpy elliott wave June 17 2014 technical dollar yen Elliott Wave analysis

Elliott Wave Education: Triangle Pattern

A Triangle is a common 5 wave pattern labeled A-B-C-D-E that moves counter-trend and is corrective in nature. Triangles move within two channel lines drawn from waves A to C, and from waves B to D. A A triangle is either contracting or expanding depending on whether the channel lines are converging or expanding. Triangles are overlapping five wave affairs that subdivide 3-3-3-3-3.

Triangle Pattern Elliott Wave Technical analysis