- USD/JPY comes with a bullish bias on the weekly and daily charts.
- A daily extension could be on the cards on a break of weekly resistance.
Bulls are stepping back in at key confluence areas on the weekly, daily and 4-hour time frames.
The following is a top-down analysis that illustrates that a monthly bullish correction would equate to a daily continuation of the price recovery from the weekly demand zone.
A restest of the broken support, aka, new resistance, could be on the cards.
The bulls are chipping away at the weekly dynamic resistance, with price supported at the structure.
A clean break from here would fulfil a daily price continuation.
The market has completed a W-formation and a pullback to the 50% mean reversion of the bullish impulse.
This is a bullish scenario and a continuation to the resistance area is highly probable.
The 4-hour time frame offers an interesting scenario.
Below the corrective lows would negate the bullish outlook and W-formation prospects.
However, should the market hold at this juncture, having met a 50% mean reversion level, a bullish impulse would be the makings of a W-formation.
A W-formation would penetrate the near-term resistance and on a pullback to the W-formation's neckline, or at least a 38.2% Fibo of the impulse, this is where a bullish opportunity would arise.
This will complete the next bullish impulse on the daily time frame.
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