The USD/JPY bearish channel is staying within the support and resistance trend lines, which probably makes it a wave C (pink). However, price will need to break below the bottom of wave A (pink) before any bearish continuation can be confirmed. The support trend line is a key decision zone, and offers a spot to trade a bullish bounce or bearish break. A bullish bounce makes an expanded wave B likely, whereas a bearish break confirms the wave C pattern (pink).
The USD/JPY is moving choppily within the downtrend channel, but price could be in a 4th wave (orange) if price manages to stay below the bottom of wave 1 (red line) and the 38.2% Fibonacci retracement level. Price has now broken below the support trend line (dotted green). A break above resistance could indicate that a bearish wave pattern is failing and could start a larger bullish correction.
