USD/JPY Falls Predicted as Technical Analysis Points to Decline

A technical analysis of the USD/JPY currency pair using the Elliott Wave Theory predicts a decline in value. The theory suggests that once a correction is completed, short positions should be considered below the level of 160.52 with a target of 151.76-148.92. A sell signal will be triggered if the price holds below 160.52.

The analysis indicates that an ascending third wave of larger degree 3 has formed on the weekly time frame, followed by a downward correction as the fourth wave 4 and the fifth wave 5 developing. On the daily chart, the first wave of smaller degree (1) of 5 has formed and a bearish correction (2) of 5 is developing.

The H4 time frame shows wave A of (2) developing, within which wave i of A has presumably been completed and a local correction ii of A is nearing completion. If the presumption is correct, USD/JPY will continue to decline to 151.76-148.92 after the correction ends.

The level of 160.52 is critical in this scenario as a breakout above it will enable the pair to continue rising to the levels of 163.90-166.50. However, when developing trading strategies, fundamental factors should also be considered as the market situation can change at any time.