USDJPY might have terminated potential Wave (ii) triangle consolidation around 114.22 on Wednesday. If correct, prices will remain below 114.70 and sharply decline below 113.30-40 mark. Bears are looking poised to target below 111.30 near term.
USDJPY larger degree wave counts suggest that a corrective structure ((A))-((B))-((C)) is complete at 114.70 mark. The rally had begun form 101.18 lows since March 2020, where Wave ((A)) and ((B)) had terminated around 111.75 and 102.59 levels respectively.
A minimum requirement for Wave ((C)) to complete was above 111.75 mark. As seen on the 4H chart, the currency pair has pushed through 114.70 levels. If the above proposed structure holds well, USDJPY should be well on its way towards 190.15 in the near term.
USDJPY needs to break below 113.00 to confirm that ears are back in control. Immediate short term price targets are 112.50 and 111.20-30 levels respectively. Prices should stay below 114.70 to keep the above bearish structure intact.
Traders might be preparing to initiate fresh short positions around current price (114.00-10), with potential risk above 114.70. A medium target could be seen lower towards 109.15 level, going forward. Only a break above 114.70 could delay the above bearish scenario.
Finacademy Technical Team
USDJPY could be progressing into a counter trend rally toward 114.30-50 zone in the next few trading sessions.
Gold dropped to $1770 mark on Tuesday before finding some support. The yellow metal is still testing its intermediate trend line support connecting $1721 and $1758 levels respectively.
The US dollar index carves a meaningful top around 96.88 mark over the last week. The index reversed sharply on Friday confirming a bearish Evening Star candlestick pattern on the daily chart.