USDJPY bulls had managed to take out past resistance at 105.65 recently as displayed on the 4H chart here. In our Weekly Newsletter this Monday, the probability of a pullback was amply discussed and bears seem to be on track towards 104.00/20 zone.
USDJPY is ideally set to resume its rally from around the above mentioned zone, keeping the bullish structure intact and push towards next resistance above 107.50 and higher. The entire structure is expected to remain bullish until prices stay above 102.59, going forward.
Alternately, if USDJPY looks to unfold as an inverted Head and Shoulder pattern, the corrective drop might extend through 103.20/30 zone to carve a potential right shoulder. Thereafter, the rally could resume towards 107.50 and further.
If the alternate count is unfolding, USDJPY may temporarily break the trend line support as shown here, but that doesn’t indicate a trend reversal. Bulls shall remain in control for the next several weeks to come and bottom line is 102.59 levels.
Looking at the wave counts, USDJPY might be progressing in Wave 3 towards 107.50 and higher. For the above to hold, 103.40 should stay intact. Alternately, an expanded flat Wave 2 could be in the making, which might terminate around 103.30 levels. Wave 3 could then resume further.
Either way, USDJPY bulls are looking poised to remain in control and push above 112.00 levels, to complete Wave (D) of a larger degree triangle. Any further dips from here should be considered as an opportunity to initiate further long positions.
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.