the USD/JPY made a bullish breakout above the resistance trend line (dotted red). The main question is whether price has started a bullish reversal or will price continue with the previous downtrend.
The current wave outlook for the USD/JPY favours a bullish reversal due to the fact that a wave 2 (purple) seems completed at the recent low around 106.75 and because price has made a decent bullish impulsive move up, which has been labelled a wave 1 (pink). The current pullback could therefore be a wave 2 (pink) but this wave 1-2 pattern is invalidated if price breaks below the 100% Fibonacci level of wave 2 vs 1.
The USD/JPY is now building a bearish impulse but this could be explained by an impulsive wave C (purple). The Fibonacci levels of wave C vs A and 2 vs 1 are potential support and bouncing spots if this wave analysis is indeed correct.