The USD/JPY made a bearish bounce at the 78.6% Fibonacci retracement level. Now it will need to make a critical decision for a bearish reversal or a bullish break and invalidation of the current wave pattern and outlook.
The USD/JPY is building a bullish channel but price did make a clear bounce at the 78.6% Fib resistance which is a key decision zone. Price will need to push above or below the channel for a clear breakout before the next direction is known.
The USD/JPY is showing impulsive price action to both directions. However, the current upside could be a wave 2 (green) if price remains below the resistance trend line (orange). A bullish break invalidates this wave pattern whereas a bearish breakout could confirm the development of a wave 3 (green).