USD/JPY has returned to a strong recovery phase, pushing decisively above the early May highs where the Bank of Japan previously stepped in to slow the advance. Despite policymakers’ ongoing efforts to support a stronger yen in order to ease inflationary pressures, those interventions have so far produced limited lasting impact. Price action has continued to recover, with the pair now trading near its 2024 highs.
From a broader technical perspective, the current structure may still be interpreted as a mature phase of a larger impulsive sequence. In Elliott Wave terms, the advance could be developing within a Wave 5 of a broader Wave C formation. If this interpretation holds, the market may be entering the final stages of the current upward cycle rather than the beginning of a new expansion phase.
On the lower timeframe structure, particularly the 4-hour chart, the rally appears to have completed a clear five-wave impulsive advance. This type of formation is often associated with the terminal portion of a trend, where momentum begins to fade even as price continues to push marginally higher. Such conditions can precede either a corrective phase or a more significant reversal, depending on broader market confirmation.
However, at this stage, no confirmed bearish reversal has occurred. The uptrend remains technically intact as long as price continues to respect the rising channel structure. The key technical trigger to watch is a decisive break below this ascending channel, which would signal a potential shift in market structure and open the door for a deeper corrective move.
If such a breakdown occurs, it could mark the beginning of a more meaningful retracement phase unfolding over the coming weeks or even months. Until then, the rally remains extended but unconfirmed as complete, leaving the market in a technically late-cycle but still active uptrend condition.
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