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
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.