Elliott waves analysis – USD/JPY. Signals for a bearish third wave are in place.

The USD/JPY pair experienced a significant spike in the last trading session, bringing the price to 61.8% of the previous downtrend. This bounce back is indicative of the completion of the correction phase, suggesting that the market is preparing for a bearish continuation in the third impulse wave.

This creates a favorable setup for traders to enter short-term sell positions. The anticipated decline is expected to be substantial, offering a good risk-reward ratio. Hence, traders can consider entering sell positions at the current market level.