Potential Short Trade Setup for USD/JPY: Elliott Wave 4th Wave Triangle
Context:
USD/JPY appears to be in a 4th wave triangle within a larger impulse wave sequence.
The price is currently charting wave E, the final wave in the triangle formation.
A short trade setup arises if resistance holds at key Fibonacci levels and the triangle completes, allowing the 5th wave to begin.
Wave E's Potential Resistance Zone:
38.2% Fibonacci retracement of wave 3: Resistance at 156.18.
61.8% Fibonacci relationship of wave E to wave C: Resistance at 156.06.
This tight resistance zone suggests it could act as the terminal point of wave E and the triangle as a whole.
Wave 4 Characteristics (Triangle Formation):
Wave 4 often forms contracting triangles, where the price consolidates with diminishing highs and lows before the trend resumes.
Wave E is the final leg in the triangle and should not exceed the apex of wave C or break below wave A.
Key Levels to Watch:
Resistance Zone: 156.06–156.18
38.2% retracement of Wave 3: 156.18
61.8% relationship of Wave E to Wave C: 156.06
Trade Setup:
Entry: Short near 156.06–156.18, where Wave E is expected to terminate.
Stop-Loss: Above Wave C apex, around 156.76.
Take-Profit: based on a 61.8% Fibonacci projection of Waves 1 + 3.
Wave 5 Target Projection: 154.30 - 153.77
Scenarios:
Wave 4 Triangle Validates: Wave E terminates in the resistance zone, leading to a bearish Wave 5 move.
Invalidation: A break above 156.76 signals a more complex Wave 4 structure or trend reversal.
This analysis is for informational and educational purposes only and does not constitute financial or trading advice
Context:
USD/JPY appears to be in a 4th wave triangle within a larger impulse wave sequence.
The price is currently charting wave E, the final wave in the triangle formation.
A short trade setup arises if resistance holds at key Fibonacci levels and the triangle completes, allowing the 5th wave to begin.
Wave E's Potential Resistance Zone:
38.2% Fibonacci retracement of wave 3: Resistance at 156.18.
61.8% Fibonacci relationship of wave E to wave C: Resistance at 156.06.
This tight resistance zone suggests it could act as the terminal point of wave E and the triangle as a whole.
Wave 4 Characteristics (Triangle Formation):
Wave 4 often forms contracting triangles, where the price consolidates with diminishing highs and lows before the trend resumes.
Wave E is the final leg in the triangle and should not exceed the apex of wave C or break below wave A.
Key Levels to Watch:
Resistance Zone: 156.06–156.18
38.2% retracement of Wave 3: 156.18
61.8% relationship of Wave E to Wave C: 156.06
Trade Setup:
Entry: Short near 156.06–156.18, where Wave E is expected to terminate.
Stop-Loss: Above Wave C apex, around 156.76.
Take-Profit: based on a 61.8% Fibonacci projection of Waves 1 + 3.
Wave 5 Target Projection: 154.30 - 153.77
Scenarios:
Wave 4 Triangle Validates: Wave E terminates in the resistance zone, leading to a bearish Wave 5 move.
Invalidation: A break above 156.76 signals a more complex Wave 4 structure or trend reversal.
This analysis is for informational and educational purposes only and does not constitute financial or trading advice
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.