The USD/JPY made a strong bullish bounce at the previous support, which has created a double bottom reversal chart pattern. The reversal is indicating that an extended ABC (purple) is most probable within wave B (pink).
The USD/JPY strong bullish momentum is indicating a wave 3 (blue) pattern. The current pullback could therefore be a wave 4 (blue) unless price breaks below the 38.2% Fibonacci retracement level because wave 4 price usually does not enter the price territory of wave 1 (blue). In that case, price could test the support (blue) again and a break below it could indicate a downtrend. A bullish break above the resistance (red) trend line could indicate a bullish breakout.
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