USD/JPY Short Trade Setup: Wave 4 Triangle Completion

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