We’ve indicated our lack of confidence in the bearish USDJPY position in recent days and today price action proved us wrong.
The decline from 108.57 is in 3 waves (clearly) and the advance from 103.76-107.08 is an impulse. As such, the USDJPY could be setting up for a bullish break (above 108.57). Another possibility is that a triangle is unfolding in the X wave position from 108.57 (this means that the rally from 95.72-108.57 is wave W). Things need to clear up although aggressive traders may look to range trade the triangle.