Source: Admiral Markets MT5 with MT5SE Add-on USD/JPY motive wave
The USD/JPY bearish channel is staying within the support and resistance trend lines, which probably makes it a wave C (pink). However, price will need to break below the bottom of wave A (pink) before any bearish continuation can be confirmed. The support trend line is a key decision zone, and offers a spot to trade a bullish bounce or bearish break. A bullish bounce makes an expanded wave B likely, whereas a bearish break confirms the wave C pattern (pink).
The USD/JPY is moving choppily within the downtrend channel, but price could be in a 4th wave (orange) if price manages to stay below the bottom of wave 1 (red line) and the 38.2% Fibonacci retracement level. Price has now broken below the support trend line (dotted green). A break above resistance could indicate that a bearish wave pattern is failing and could start a larger bullish correction.
This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.