USDJPY has cleared its first potential target around 111.11 mark, several weeks after printing lows at 107.47 levels. The rally has unfolded in-line with projections and could still continue to extend through 112.50 and higher levels.
USDJPY technically needs to print above 111.75 levels to complete its wave structure since March 2020 lows registered around 101.18 levels. A larger degree A-B-C was underway since 101.18 with Wave A and B terminating around 111.75 and 102.59 levels respectively.
Wave C needs to push at least above 111.75 to complete the structure, with potential to push through 112.50 and higher going forward. Bulls might be inclined to remain in control for now with immediate support seen towards 110.40 levels.
Looking at the wave structure since 102.59 lows registered on January 06, 2021; USDJPY has been carving a 5 wave rally towards 111.75 and 112.50. Within the impulse rally, it seems to have completed lower degree Waves 1, 2, 3, and 4 respectively with 4th wave terminating around 107.47 levels.
If the above structure holds well, USDJPY might be underway towards Wave 5 termination within Wave (3) of (5). Traders might want to remain long since there is much more upside left for now.
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.