USD/JPY Bullish But Channel Top Should Create Bull Flag Soon

USD/JPY has reached the top of the bullish trend channel again. The JPY weakness trend, however, is strong.

USD/JPY is showing multiple higher highs and higher lows. The bullish price swings are impulsive whereas the bearish ones are mostly corrective. What does this mean?

On the 1 hour chart, price action is looking for an immediate bullish breakout (green arrow). The target is aiming at the 107.50-107.75 zone.

Price action could break above the channel this time around. Let’s review.

Price charts and technical analysis

The USD/JPY is showing multiple higher highs and higher lows. The bullish price swings are impulsive whereas the bearish ones are mostly corrective. What does this mean?

1. It confirms a bullish 5 wave pattern (purple) in a larger wave C.
2. The wave 5 (pink) is now testing the channel resistance and Wizz 7 target.
3. This zone could create a bearish correction such as a bear flag (orange arrows).
4. An immediate push higher could reach the round level at 107.50-107.75.
5. An uptrend continuation is expected (green arrow) towards Wizz 8 at 108.70 after the bull flag.
6. The uptrend remains valid as long as price action remains within the bullish channel.

On the 1 hour chart, price action is looking for an immediate bullish breakout (green arrow). The immediate target is aiming at the 107.50-107.75 zone.

1. Eventually a bull flag pattern (grey arrows) is expected.
2. This could complete wave 4 (grey).
3. The bullish breakout (blue arrow) should continue higher after wave 4 is completed.
4. The long-term 144-233 ema moving averages should act as support if price action retraces that deep.
5. Only a break below those EMAs places the uptrend in danger.