The USD/JPY wave pattern reversed sharply back into its medium-term downside trends. We’ll use these trends (blue and green) as guidelines for what the currency pair may be up to. A quick follow through to the upside raises odds for an extension to the upside. We would not want to see the orange trend channel violated within this scenario, which is depicted in red.
The black scenario suggests a significant reversal occurred last week. Odds are favoring the black scenario at this point. It does smell like a failed breakout attempt by the bulls. Nevertheless, bears still have to transform wave action into a motive wave.
All in all, the USD/JPY wave structure is likely to reverse soon if it has not done that already.
USD/JPY 120min Chart