the USD/JPY made a bullish breakout during yesterday’s FOMC and interest rate cut in the US to 2% but ultimately was unable to break above the resistance trend line (red). Price is now testing the support Fibonacci levels of wave 4 (blue).
The USD/JPY could bounce at the Fibonacci levels of wave 4 vs 3 if the wave pattern is correct. A break below the 61.% Fibonacci level of wave 4 vs 3 invalidates the wave 4 (blue) pattern and indicates a larger bearish retracement. A bullish break above the 108.50 target means that an uptrend continuation towards the Fibonacci targets is likely.
The USD/JPY seems to be building a bearish ABC (green) pattern within the wave 4 (blue). The price action remains bullish as long as price stays above the key support zone (blue box). One more lower low is possible if the price respects the Fibonacci retracement levels of wave 4 vs 3.
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Chris Svorcik Elite CurrenSea