- USD / JPY has a bullish bias on the weekly and daily charts.
- A daily extension could be on the table following a breakout of weekly resistance.
The bulls are retreating in key areas of confluence on the weekly, daily and 4-hour time frames.
The following is a top-down analysis showing that a monthly upward correction would mean a continuation of the daily price recovery from the weekly demand zone.
USD / JPY monthly chart
A new test of broken support, now turned into resistance, could be on the table.
USD / JPY weekly chart
The bulls are looking to break out of the weekly resistance, with the price supported by the structure.
A clean breakout would end with a daily continuation of prices.
USD / JPY daily chart
The market has completed a W formation and a 50% Fibonacci retracement of the bullish momentum.
This is a bullish scenario and it is very likely that it will continue towards the resistance zone.
USD / JPY 4-hour chart
The 4 hour time frame offers an interesting scenario.
Below the corrective lows, the bullish outlook and the formation outlook for W.
However, if the market holds at this juncture, after reaching the 50% Fibonacci retracement, a bullish momentum would be the basis for a W formation.
A W formation would penetrate short-term resistance and target a pullback to the neckline of the W formation, or at least the 38.2% Fibonacci retracement of momentum, where a bullish opportunity would arise.
This will complete the next bullish momentum on the daily time frame.