The USD/JPY turned south again. Will the downtrend continue or is it just a delay of a reversal?
This analysis will provide updated price-action scenarios for the USD/JPY.
The white line scenario suggests that purple Wave 4 was completed at the high of 21st Feb. Current price behavior makes a good case for this option, but the internal structure of purple Wave 4 does not provide clear confirmation. It would need to have been a very straight looking zigzag.
This uncertainty opens the possibility for the black line scenario, which would mean that we are still within a more complex correction. What is labelled as purple wave 4 in the provided charts would in that case only be an impulsive wave A of 4… implying that price would first need to make another bullish bounce before breaking into a new low.
There is a fairly decent POC zone at 105.00, consisting of the round number 105 itself, the 78.6% fib level of a critical long-term swing, plus a weekly pivot support level. Wave size relationships of the white line scenario would also make a neat conclusion at around 105.
There is no other support close by. 104.50 or 104 would be the next stop if 105 breaks, which would coincide with the support line of a large trend channel.
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