USD/JPY Enters Third Elliott Wave with Bullish Momentum Building

USD/JPY has entered its third Elliott Wave pattern, signaling potential continuation of the upward trend as the pair trades near 151.80. Technical analysis reveals classic wave formation characteristics, with the current third wave typically representing the strongest and longest impulse move in Elliott Wave theory. The US Dollar Index (DXY) provides underlying support at 104.20, reinforcing the bullish structure despite recent consolidation. Key resistance lies at 152.50, coinciding with the November high, while immediate support has formed at 151.20. Volume indicators confirm increasing participation during upward moves, validating the wave count interpretation. Japanese economic data remains subdued, with the Bank of Japan maintaining its ultra-loose monetary policy stance, creating favorable conditions for USD/JPY appreciation. Traders should monitor the 153.00 psychological level as the next major target if the third wave extends as projected, with stop-loss considerations below the 150.50 wave invalidation point.