USD/JPY 4-hour Elliott Wave Theory analysis. Post-160.724 peak Wave 4 correction, (a)-(b)-(c) structure and critical Fibonacci targets. Updated technical analysis.
The recent movements in the USD/JPY pair at the beginning of May 2026 indicate a significant turning point within the Elliott Wave Theory framework. Detailed examination on the 4-hour chart shows that major Wave 3 has completed and Wave 4 correction is now active.
Elliott Wave Analysis: Current Structure
Examining the chart from the left side; after Wave (iv) correction, Wave (v) impulsive move completed major Wave 1. Subsequently, Wave 2 correction occurred within an (a)-(b)-(c) structure, and Wave 3 impulsive movement began. The sub-waves within Wave 3 — (i)-(ii)-(iii)-(iv)-(v) — are clearly identifiable. Particularly, Wave 3(v) peak formed at 160.724, completing this major impulsive wave.
We are currently within Wave 4 correction. This correction typically occurs in an (a)-(b)-(c) zigzag structure:
Table
| Wave | Status | Target Level | Fibonacci Ratio |
|---|---|---|---|
| (a) | ??? Completed | ~155.500 | - |
| (b) | ???? In Progress | 158.725 | 0.618 |
| (c) | ??? Pending | 153.613 | 0.382 |
Wave (b) rebound may target 158.725, which is the 0.618 retracement of Wave (a)'s decline. This level is also marked on the chart as a significant resistance zone. Once Wave (b) completes, Wave (c) decline will begin, with 153.613 (0.382 Fibonacci) as the critical support target.
Alternative Scenario
If Wave (b) breaks above 158.725 or remains shorter, the scenario must be updated. In extreme cases, Wave (c) could deepen to 151.416 (0.5 Fibonacci). However, the main scenario maintains the 153.613 target.
Why Does It Matter?
Wave 4 corrections in Elliott Wave Theory represent the breathing period before the trend continues. During this period:
• Risk management is critically important • Position sizes should be reviewed • Wave (b) rebound may offer short-term opportunities • When Wave (c) completes, new positions for Wave 5 impulsive move can be evaluated
Conclusion
USD/JPY 4-hour chart shows active Wave 4 correction. While Wave (b) rebound continues targeting 158.725, Wave (c) is expected with 153.613 as the critical support target. This analysis is for educational purposes; please do your own research before making investment decisions.