EUR/JPY has been trading sideways, choppy, overlapping, and in a contracting range since 2008, which made us think that a triangle consolidation was in action within a higher degree blue wave B correction. We now see five legs within a possibly completed triangle: A)-B)-C)-D) and E), so current recovery from 114.34 level can be part of a bullish turn, which may be part of a bigger, bullish cycle. We know that after a wave B correction, an impulsive turn as wave C can follow, in five bigger legs.

That said, for confirmation that bulls are taking over, and that a triangle is over we would need a break above the 127.50 level, and afterwards a break above the upper triangle line, connected through legs B) and D).

EUR/JPY, weekly

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 E, 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.

Triangles can occur in wave 4, wave B, wave X position, or in some very rare cases also in wave Y of a combination.