the USD/JPY is testing the critical support zone (green box) on the weekly chart. Price has already made a bullish bounce. Can the USD/JPY make a reversal?
The USD/JPY bears have been in control for a while, but the entire chart pattern seems to be a contracting triangle. The previous low is estimated to be a wave C (purple), which means that price action is expected to build a bullish ABC (orange) within wave D (purple). Any break below the bottom of wave C invalidates (red x) the development of Wave D now but not the entire triangle. A bullish bounce at the support zone could confirm the upside as well as a break above the local resistance (orange box).
The daily chart is building a bearish trend channel. The breaks below the 21 ema and red SWAT candles with the long-term trend (price is below long-term emas) provided plenty of movement lower. But now price action could be running out of steam at the Wizz 8 target zone. A potential inverted head and shoulders (blue boxes) could emerge as a reversal chart pattern. Price will need to break to confirm the reversal. In that case, price action could complete wave B (orange) and start wave C (orange).