USDJPY might have carved a lower high around 111.70-80 zone on Wednesday. Bears could be inclined to drag prices lower through 110.25 at least, which is the fibonacci 0.618 retracement of the recent upswing between 109.15 and 112.08 mark respectively.
USDJPY could be unfolding a corrective drop a-b-c towards 110.25, before resuming higher again. Furthermore, wave a and b seems to be in place around 110.80 and 111.70-80 levels as seen on the 4H chart presented here.
If the above short term proposed wave count is correct, USDJPY could be producing a sharp wave c decline to complete the corrective structure around 110.25. A bullish reversal there would warrant a trend reversal and push prices higher through 112.50.
Alternatively, if the decline extends and sub divides into five waves, it could target 109.15 mark, which is the previous triangle termination. It would also confirm that USDJPY is topped out around 112.08 and bears are back in control.
Traders might want to position themselves accordingly on the short side with risk above 112.08 and potential target around 110.25 at least. A break above 112,08 will change the structure to bullish again in the near term.
Finacademy Technical Team
USDJPY could be progressing into a counter trend rally toward 114.30-50 zone in the next few trading sessions.
Gold dropped to $1770 mark on Tuesday before finding some support. The yellow metal is still testing its intermediate trend line support connecting $1721 and $1758 levels respectively.
The US dollar index carves a meaningful top around 96.88 mark over the last week. The index reversed sharply on Friday confirming a bearish Evening Star candlestick pattern on the daily chart.