What every Elliott Wave analyst wants to see is a five-wave sequence, followed by a three-wave decline. In other words, the common 5-3 Elliott Wave cycle, after which the trend is expected to resume in the direction of the impulsive five. This is exactly what we have on the hourly chart of USDJPY, shown below.
Recommended reading: USDJPY just went out of that triangle
You can see the five-wave decline from 102.30 and its corresponding w-x-y correction. Wave Y is currently in the gravity zone of the 61.8% Fibonacci level, where second waves often terminate. This is the reason why we think the stage is set for another decline in USDJPY. The invalidation of this count comes at 102.30, while if it turns out to be the correct one, we should expect the support of 100.75 to be finally broken.
