The USD/JPY could be building a bearish ABC (pink) correction pattern as long as price stays below the 138.2% Fibonacci level of wave B vs A. A break below the support trend line (blue) confirms a larger wave C (pink) and is likely to aim at the previous bottom (orange arrow), which could be a bouncing a spot (green arrows).
The USD/JPY seems to have completed a bullish ABC (purple) zigzag pattern at the previous high. The current bearish price action could indicate a 5 wave pattern in an ABC flat correction (pink) if price manages to break (green check) support and stay below resistance (red x). The main target is the 100% Fibonacci level of wave C vs A.
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This article was originally posted on FX Empire
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