USDJPY carves a potential bottom around 109.20 mark

Technical Analysis:

USDJPY had dropped through 109.20 levels yesterday before bouncing back and rallying through 109.66 highs intraday. Bulls seems to be back in control and looking poised to push higher towards 111.30 and 112.50 at least.

USDJPY has been in an uptrend since 102.59 lows registered on January 06, 2021, which has already been presented early. The currency might be unfolding a lower degree wave iii within wave (iii) of Wave 5 of (3) as labelled on the chart view.

The above proposed bullish structure is expected to hold until prices stay above 107.47 lows, which is right at the 05 month old trend line support as seen here. USDJPY has tested the above trend line support at least 04 times in the past few weeks and seem to be holding it.

The recent lower degree wave I and ii seem to be in place around 110.33 and 109.20 levels respectively. If the above is correct, we can expect wave iii rally towards 111.00 and higher in the near term. Expect 109.20 to hold going forward.

Most traders might be preparing to hold and initiate fresh long positions around current levels (109.55) with a risk around 107.50. Potential targets remain above 112.50 mark over the next few weeks.

Prepared by

Finacademy Technical Team