The USD/JPY pair has seen a pullback after hitting a market bottom on August 5th. While the current move higher is considered corrective, there is potential for further upside that could signal a reversal in trend.
Based on the short and medium-term trends, USD/JPY appears to be in a downtrend, suggesting a bearish bias over the next 6 months. However, the long-term trend remains bullish.
USD/JPY 4-hour Chart
The recent recovery from the August 5 lows seems to be corrective in nature. A break below 145.43 could indicate a continuation of the downtrend, with a target at 141.69. However, strong support at 140.44 is expected to limit further weakness.
There is a possibility of a short-term trend change, with a break above the August 7 high of 147.91 casting doubt on the current downtrend and suggesting a potential reversal. The completion of a standard abc correction pattern could lead to a move up to 150.90 if the highs of wave “c” are breached.
Analysis:
Overall, the USD/JPY pair is showing signs of a potential reversal in trend. Traders should keep a close eye on key support and resistance levels to gauge the strength of the current market movement. A break above certain levels could signal a shift in momentum and indicate a new uptrend in the making. It is important to monitor the market closely and adjust trading strategies accordingly to capitalize on potential opportunities.