July 22, 2021
USDJPY bounced off sharply after printing lows around 109.00 levels early this week. We were expecting a potential drop until 108.50 mark, which is fibonacci 0.382 retracement of larger degree Wave (3) between 103.30 and 111.75 levels respectively.
USDJPY might have terminated Wave (4) just above 109.00 mark before reversing sharply towards 110.38 yesterday. Also note that bulls have managed to take out interim resistance around 110.30 mark yesterday indicating further upside potential going forward.
If the above structure holds well, USDJPY bulls might be poised to push through 112.50 and 113.50 levels as Wave (5) progresses. It would potentially complete the larger degree corrective rally that had begun from 101.18 levels since March 2020.
USDJPY bulls must hold above 109.00 to keep the above bullish scenario intact over the short term. A drop lower might indicate that Wave (4) is still unfolding in a complex correction. A push above 111.00 from here, will confirm that Wave (4) is in place around 109.00 levels.
Traders might want to again position themselves on the long side from around 109.80/90 levels with risk below 109.00 for now. Potential targets point towards 112.50 and 113.50 levels respectively.
Finacademy Technical Team
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