USDJPY has rallied to fresh swing highs at 112.04 taking out 111.75 resistance. The corrective structure, which began from 101.18 lows in March 2020 might be complete or near to completion. The rally between 109.12 and 112.04 is also an impulse wave, which looks complete.
If the above structure holds well, USDJPY might be preparing to produce a pullback from current levels, and break below 109.00. Alternately, the drop could be corrective towards 110.26 levels, before bulls are back in control.
USDJPY has been unfolding into a larger degree (A)-(B)-(C) corrective rally since 101.18 mark, as discussed earlier. Wave (A) reached up to 111.75 and (B) had retraced through 102.59 lows in January 2021. Wave (C) might have completed minimum requirements after hitting 112.04 on Wednesday.
Further looking into Wave (C) rally between 102.59 and 112.04, USDJPY has subdivided into three waves. The first wave was between 102.59 and 111.65, which subdivided into five waves. It was followed by a triangle correction highlighted here on the chart.
The rally between 109.12 and 112.04 is Wave (C) termination or Wave 1 of C. Either way, traders might prepare to face strong resistance around 112.00-50 mark going forward.
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.