USDJPY prepares to push through 111.20 levels

Technical Analysis:

USDJPY breaks higher towards 110.80 levels yesterday as the technical direction was clear and discussed here. At times market awaits a trigger to push through its determined trend; it was the Fed interest rate yesterday that provided the same.

USDJPY bulls are looking determined to push through 111.20 levels in the immediate short term, before producing any major pullbacks. Potential remains to push higher towards 112.50 levels in the next few weeks.

Looking at the wave structure USDJPY has been producing a larger degree Wave (C) since 102.59 lows registered on January 06, 2021. Ideally the C wave would unfold into an impulse or a diagonal. In this case it looks like an impulse unfolding.

The rally since 102.59 seems to be progressing in larger degree Wave (3) within the prosed 5 waves rally. Please also note that 3^rd of (3) wave was extended while Wave 4 terminated around 107.47 levels respectively.

Since then, USDJPY bulls have been unfolding Wave 5 of (3) higher towards 112.50 levels. Furthermore, lower degree Wave (iii) seems to be progressing towards 111.20 for now. If the above structure unfolds accordingly, prices would stay above 107.47 going further.

Prepared by

Finacademy Technical Team