the USD/JPY made a strong bearish reversal when approaching the 109.50 target zone. The bearish momentum broke several key support levels (blue lines) and indicates a potential deep retracement.
The USD/JPY bearish impulse is probably a wave A (pink) of a larger ABC (pink) zigzag within potential wave 2 (purple). The wave A (pink) might not yet be completed and could extend lower towards the 38.2% Fibonacci level of wave 2 vs 1 before finding stronger support.
The USD/JPY has probably completed an impulsive wave 3 (purple) at the recent low. The pullback is expected to be a shallow and corrective move up as part of a wave 4 (purple) correction as long as price stays below (red x) the 61.8% Fibonacci retracement level of wave 4 vs 3. A bearish breakout could confirm (green check) the bearish continuation.
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