USDJPY had reached up to 115.52 mark on Wednesday before finding resistance and pulling back. The currency is close to carving a meaningful top as we have been discussing lately. A break below 114.85 will confirm the first step of a potential bearish reversal.
USDJPY faces strong support around 113.50 and 112.75 and prices need to break lower to accelerate towards 109.00 in the next few weeks. Also, the rising trend line support would break with the above supports being taken out. Bears would be back in control and here to stay for long.
USDJPY has been rallying since March 2020 lows around 101.18 levels. The currency pair has carved a larger degree corrective wave ((A))-((B))-((C)), which is partially seen on the 4H chart presented here. Further note that the above rally between 101.18 and 115.52 is part of a triangle structure.
The termination of the above rally is expected to be around 115.50-75 zone, which is Wave (D) within the above triangle. If correct, USDJPY will be on its way towards 106.00 levels soon to terminate Wave (E) of the triangle, before turning higher again.
Traders will remain poised to initiate fresh short positions between 115.30 and 115.50, with potential risk above 116.00 and target below 106.00.
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.