The USD/JPY is moving higher in an uptrend channel but a wave 3 (pink) pattern can only be confirmed once price breaks above the -61.8% Fibonacci target. The current upside could also be a wave 1 (purple) if price breaks the previous top or a wave B if price breaks below the support trend line (blue) of the uptrend channel. A bullish break aims for the Fibonacci targets whereas a bearish breakout aims at the previous bottom at the 78.6% Fibonacci retracement level.
The USD/JPY seems to be building a wave 4 (orange) retracement after respecting and bouncing at the 50% Fibonacci level of wave 4 vs 3. The USD/JPY would now need to break above the resistance trend line (red) for a confirmation of the wave 5 (orange) and a potential move up towards the top of the channel.
