On the Daily chart of USDJPY we are observing a nice higher impulsive decline taking place, with price now trading in one of its temporary corrective sub-waves, wave 4-circled. If that is the case, then current sideways price action could suggest that we are dealing with a triangle correction, a continuation pattern that can, after its completion, push price to 96.00 area, within blue wave 5-circled.
USDJPY, Daily
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:
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