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
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.