the EUR/JPY made a bullish reversal at the deep 78.6% Fibonacci retracement level. Could this be the start of a new uptrend for an impulsive wave 3?
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The EUR/JPY needs a break above the resistance trend line (dark red) to confirm the bullish reversal whereas a break below the bottom (blue box) and 100% Fibonacci level invalidates the current wave 1-2 pattern (pink). For a larger uptrend to be confirmed, price needs to break above the other resistance lines (red).
The EUR/JPY seems to have completed 5 waves up (blue) within a bullish channel. The break below the support (blue) of the channel could indicate a bearish retracement and possible wave 2 (purple) pattern as long as price stays above the 100% Fib of wave 2 vs 1. A breakout above the resistance (red) line is likely to end the wave 2 correction and could start an impulsive wave 3 (purple) pattern towards the Fibonacci levels of wave 3 vs 1.
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