USDJPY consolidates between 109.00 and 110.50

Technical Analysis:

USDJPY had managed to push toward 110.40 mark on Wednesday only to find resistance. The currency has pullback and is trading just below the 110.00 mark at this point in writing. Please note that a break below 109.50 and further 109.00 would bring back bears in control.

USDJPY has been carving a larger degree (A)-(B)-(C) corrective rally since 101.18 lows in January 2021. The currency pair had rallied through 111.75 to terminate Wave (A), followed by a drop towards 102.59, terminating Wave (B).

Since then, USDJPY has been carving a Wave (C) rally towards 112.50 and higher. Within the above larger degree wave, the currency has terminated Waves (!) through (4) already around 104.40/50, 103.20/30, 111.50/60 and possibly 108.70 levels.

If the 5^th wave is underway, USD/JPY would break above the resistance around 111.60 level and push towards 112.50 at least. This would complete the entire corrective structure between 101.18 and 112.50 levels respectively.

Only a break below 108.70 will change the structure in the near term, before bulls are back in control to push higher again. Either way, traders might be preparing to initiate long positions or hold them with a potential target above 112.50.

Prepared by

Finacademy Technical Team