USDJPY had dropped through 108.33 lows over the last week to carve a lower degree Wave ii as expected ad discussed here. Furthermore, it has also tested the same and bounced back sharply higher towards 109.80 levels until now. Bulls are looking poised to push higher towards 111.10 and 112.50 levels going forward.
USDJPY had earlier bounced off 107.47 lows around trend line support having carved a larger degree Wave 4 as highlighted on the chart here. If the above structure is correct, the currency seems to be underway towards Wave 5 termination around 112.50 levels at least.
Looking at the overall wave structure since 102.59 lows registered on January 06, 2021; USDJPY has been carving higher highs and higher lows. At a larger degree, it is carving Wave (C) of a corrective pattern (A)-(B)-(C), which had begun since 101.18 levels earlier.
The larger degree Wave (B) had terminated around 102.59 levels and since then Wave (C) has been unfolding, which is expected to terminate around 112.50 at least. The sub waves with Wave (C) are unfolding as follows: Wave (1), (2) terminated around 104.40 and 103.30 respectively.
Wave (3) might be still unfolding as 3rd wave was extended and it terminated around 111.00 levels. The corrective drop towards 107.47 can be labelled as Wave 4, right at the trend line support. If the above structure holds well, USDJPY bulls are now poised to continue higher.
Most traders might have initiated fresh long positions around 107.50/108.00 levels with projected target potential above 112.50 at least. Any dip from here could be corrective and ideally stays above 107.47 levels, going further.
Finacademy Technical Team
EURUSD has finally reversed lower from 1.2218 highs last week, after having drifted sideways for a while. The drop was much anticipated as bears have managed to take out over 300 pips since last Wednesday. They remain poised to target below 1.1700 in the near term.
US Dollar Index has raised through 92.00 levels as of now and bulls are looking poised to extend further through 95.00, 96.00 levels in the next few weeks. It is quite possible that they continue higher from here itself or after a pullback, but prices stay above 89.60 levels.
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.