After a very strong performance by USD JPY, which almost led it to the 122 mark, the pair slipped down to about 115.50 as of today. A decline of more than 6 figures in just 7 trading days may look a little scary to the bulls. However, the wave structure of this sell-off seems to be telling a different story.
As visible, it takes the form of a zig-zag A-B-C correction with a triangle in the middle. According to the Elliott Wave Principle, triangles precede the final movement of the larger sequence. The larger sequence here is the zig-zag retracement itself. The final movement is supposed to be wave C. If this is the correct count, we should expect a recovery, which could take USD JPY up to the 120s again.
