the USD/JPY has arrived at a key decision zone after failing to break above the previous top (wave 1 pink). A break below the channel (blue) indicates a bearish wave C correction whereas a bullish breakout (red line) could see an uptrend continuation. The breakout direction could depend on the FED’s decision on the interest rate in the US, statement and press conference.
The USD/JPY is moving higher in an uptrend channel but a wave 3 (pink) pattern can only be confirmed once price breaks above the -61.8% Fibonacci target. The current upside could also be a wave 1 (purple) if price breaks the previous top or a wave B if price breaks below the support trend line (blue) of the uptrend channel. A bullish break aims for the Fibonacci targets whereas a bearish breakout aims at the previous bottom at the 78.6% Fibonacci retracement level.
The USD/JPY seems to be building a wave 4 (orange) retracement after respecting and bouncing at the 50% Fibonacci level of wave 4 vs 3. The USD/JPY would now need to break above the resistance trend line (red) for a confirmation of the wave 5 (orange) and a potential move up towards the top of the channel.
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Chris Svorcik Elite CurrenSea