On the 4h chart of GBPJPY we are looking at a triangle correction pattern taking place within wave 4, with two more waves to go. At the moment we see price turning down into wave “d” to around 131/132 area. But keep in mind that we will also need wave “e” before bigger downtrend may resume based on bigger time-frame charts.
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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 subdivide into 3-3-3-3-3.
Basic Triangle Pattern: