USDJPY bulls managed to push prices towards 110.00/10 handle before finding some resistance. The currency seem to be trading within a very tight range looking for a breakout. Potential remains for a bullish breakout if it manages to clear above 110. 20 mark.
USDJPY has been carving a larger degree (A)-(B)-(C) rally since 101.18 lows as discussed earlier. The currency has already terminated Wave (A) around 111.75 and Wave (B) at 102.59 mark respectively. Since then, Wave (C) is unfolding as an impulse, and is expected to reach at least 112.50.
Looking into the sub waves within Wave (C), USDJPY has either terminated a larger degree Wave (3) around 111.60 or an impulse. In case of a Wave (3) termination complete, the currency is working on a Wave (4) potential triangle scenario.
If Wave (4) completed as a triangle, prices will stay above 109.00 handle and continue pushing higher from current levels. A breakout above 110.20 will confirm that bulls are back in control and that prices are now headed towards 112.50 and higher.
Alternately, USDJPY could drop through 107.50 levels before turning higher again. Either ways, traders can prepare to initiate fresh long positions going forward.
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.