USDJPY remains bullish over the medium term and might remain poised to push through 112/50 and 113.00 levels going forward. In the near term though, the currency might drop through 108.50 mark, before terminating Wave (4) as labelled on the chart here.
USDJPY has been rallying against 102.59 lows registered on January 06, 2021. It is expected to terminate above 111.75 at least, to complete the corrective (A)-(B)-(C) rally that had begun since 101.18 level in March 2020 earlier.
A larger degree Wave (C) has been unfolding as an impulse (5 wave) since 102.59 lows. Please also note that USDJPY bulls have already managed to terminate Waves (1), (2) and (3) around 104.40, 103.30 and 111.74 levels respectively.
Since then, a larger degree Wave (4) has been unfolding and it might have terminated close to 109.00/10 levels on July 19, 2021. If the above structure holds well, USDJPY might have resumed Wave (5) higher against 109.00 levels.
Alternately, if Wave (4) is still unfolding as a complex correction, USDJPY bears might still remain inclined to drag below 109.00 levels in the near term. Either from here or 108.50 levels, traders might be inclined to remain long.
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.