Elliott Wave Analysis: USDJPY May See Higher Levels; 116.0 In View

A strong rally on USDJPY suggests that market is in a bigger and more complex recovery which can be wave B of a higher degree as shown on a daily chart. If that's the case then on the 4h chart, leg up from August low is sub-wave C) that should reach much higher levels after a pullback fully unfolds in sub-wave 4, which looks to be unfolding as an EW triangle correction. As such break above the upper triangle line would confirm fourth wave correction being over and more upside in play for wave 5.

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 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.

Basic Triangle Pattern:

USDJPY, 4h

USDJPY, Daily