USD/JPY Bearish Break of Channel Starts ABC Zigzag

Forex Trader, Analyst, Educator • Jul 4, 2018 at 4:55 AM EDT

The USD/JPY broke below the support trend line of the uptrend channel after failing to break above the previous top at 111.40.

USD/JPY

4 hour

The USD/JPY broke below the support trend line (dotted blue) of the uptrend channel after failing to break above the previous top at 111.40. Price is probably expanding the wave X (pink) correction but price would need to break below the next support trend line (blue) to confirm this wave pattern.

1 hour

The USD/JPY seems to be building 5 bearish waves which could be part of a wave A (blue). A break above the channel could indicate a wave B (blue) retracement if price respects the Fibonacci retracement levels. A break above the 100% Fib invalidates the ABC pattern.

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