USDJPY – The price broke below an important level, but that doesn’t solve anything for sellers

29.12.2023

The price went down sharply activating a sell signal. However, there was no continuation of the decline and it is alarming. Already now we can see that the dollar is trying to improve its position and change the unfavorable situation in its favor.

For now, the scenario with the decline in wave (iii) of the initial diagonal triangle remains the main one. But, it seems worth considering a possible alternative.

In case the price starts to grow rapidly, perhaps it will be caused by the formation of wave (ii). Then the initial diagonal triangle will turn out as indicated on the chart with long wave 1 and short wave 5. A slightly nondescript model, nevertheless has chances to make the considered situation the main scenario.

In this regard, it is recommended to keep open sell trades in operation. New ones should be opened on updating of the current local minimum.

Recommendations: Sell 140.30, SL 140.70, TP 137.00.