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
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.