The Japanese yen (FOREX:USDJPY) did not accelerate to the upside yet, so it seems that we will have to wait on a bullish price action a little longer. As such, we adjusted the wave count and suspect that the pair is in final stages of a wave (4) now. We, however, are still observing a triangle that should be near completion. We see wave E down that could look for a bottom around 97.00 area from where we could reverse up in wave (5). An impulsive rally from current zone would be a confirmation for a new bullish period on USD/JPY.
On 4h Chart, USD/JPY is still in bearish mode and testing 97.00 level where we see some very important Fibonacci levels that could react as a strong support for the pair. In fact, we are tracking wave E from 100.55, which is a final leg within larger fourth wave triangle so bullish reversal could be near, and should not be a surprise if we consider that decline from early September is looking corrective in nature with its overlapping wave structure within corrective channel, labeled now as a simple A-B-C move. We need an impulsive bounce in price back to 98.70 swing high to confirm low in place.
On the intraday chart, we see a wedge shape formation that has taken place in the last few days that could be an ending diagonal. This pattern occurs at the end of a larger trend, and usually predicts a strong reversal in trend. It’s also important to know that each leg of an ending diagonal is made by three waves. For now we have a textbook example of this structure. If our bias is correct then pair is now in wave (v), final leg of an ending diagonal that could find a support around 96.60/96.80. Pair on the radar screen!