USD/JPY is recovering from the lower triangle line, which can suggest a completed leg D of a triangle and final wave E to be in progress. Wave E can now unfold a three-wave pullback and face some resistance at the 106.71 level. A latter drop in impulsive fashion, below the 105.62 level would confirm more weakness on USD/JPY.
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 subpide 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.
Elliott wave triangle:
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