USDJPY seems to have carved a meaningful top around 114.70 mark on Wednesday. The currency has dropped through 114.00 since then and is looking to drag lower below 113.80 in the near term. Bears are poised to remain in control from here.
USDJPY has terminated a larger degree Wave ((C)), within the corrective ((A))-((B))-((C)) rally that had begun since 101.18 lows in March 2020. If correct, the currency is looking to drop toward 105.00-106.00 retracing the entire above rally.
Looking at the larger degree wave structure, USDJPY had rallied between 101.18 and 111.75 to terminate Wave ((A)). The subsequent drop to 112.59 on January 6, 2021 was Wave ((B)) and since then, the rally through 114.70 is potential ((C)) termination.
USDJPY bears will remain inclined to carve a similar degree corrective drop retracing towards the fibonacci 0.618 mark of the above rally. A break below 113.90 could be the first confirmation of a potential bearish resumption.
Traders might be preparing to initiate fresh short positions around 114.40-50 zone or continue holding existing shorts. Potential risk remains above 115.00 and target is towards 109.00 levels in the next few weeks’ time.
Finacademy Technical Team
Gold prices dropped through $1773 lows on Thursday before finding support again. The drop from $1793 was in-line with price action of a gartley.
The US dollar index might have carved a lower high around 96.50 mark on Tuesday. The index dropped through 95.80 levels on Wednesday before finding some support.
USDJPY is soon approaching a formidable resistance zone around the 114.40-50 mark. The currency pair has been carving a corrective rally since 112.50 lows.