the USD/JPY showed a strong bullish bounce after reaching 106.75 and the support trend line (blue). Is the USD/JPY ready for a larger bullish reversal?
The USD/JPY could be completing a larger bearish wave 2 (purple) pattern, which would indicate that a large bearish corrective price swing has ended and a new bullish swing could be starting. Although price is showing the first signs of a new bullish swing after breaking a local resistance trend line (dotted red), price still needs to break above the larger resistance trend line (red solid) of the downtrend channel. If price does push lower, then the 78.6% Fibonacci level of wave 2 vs 1 at 106.34 is expected to act as a support zone.
The USD/JPY seems to have completed the bearish wave C (blue) as we expected in the previous wave analysis of the USD/JPY. Price has made a wave 4 (green) correction, which was followed by a final push lower via wave 5 of wave C (blue). Currently price is moving higher and showing strong bullish impulsive price action, which could be a wave 3 (purple) pattern.
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Chris Svorcik Elite CurrenSea