In our last article about USDJPY we were expecting a significant decline from the highs of 103. If you have been following this pair, you should have noticed, that the pair dropped by some 150 pips and closed at 101.32 on Friday, July 11th 2014. Our bearish expectation have been fulfilled so far. However, we have to admit that there has been a lot of relabeling lately. On the chart below you can see the updated Elliott Wave count of USDJPY.
And the updated count suggests for a triangle in wave B position of an A-B-C zig-zag to the south. It looks like this pattern has just been broken by the price. Triangles precede the final movement of the larger sequence. Since wave A is an impulse, we should now expect the same pattern to unfold in wave C to the downside. If this is the correct count, we have to prepare for a small rally to around 101.80, followed by a strong sell-off in wave (3) of C to the downside. Right now, we do not know where this presumed A-B-C patterns fits into the bigger picture. In order to gain more knowledge of that, we just have to wait a while until the Market decides to reveal a little more of its plans.
