USDJPY might be unfolding as a triangle consolidation in the short term before extending its rally towards 108.00/30 levels. Another marginal drop below 107.00 mark would complete the triangle and bulls might be back in control to push towards 108.30 levels.
USDJPY short term wave structure has been displayed here on an hourly chart. Immediate resistance is seen at 109.85, while support is intact around 106.00 going forward. The currency needs to break either side to confirm the next major move.
The recent drop between 109.85 and 106.00 might be retraced towards fibonacci 0.618 levels, before USDJPY reverses lower again. The downside projections remain towards 105.00 at least and up to 103.00, 101.00 respectively, going forward.
On the flip side, if USDJPY breaks below 106.00 mark from here, it would imply a potential lower top is in place around 108.00/15 already and that bears are poised to push lower. Either way, the anti-risk Japanese Yen might be setting up to gain against the US Dollar.
USDJPY larger degree wave structure also indicates a potential bearish structure until prices stay below 111.75 and 112.22 levels respectively. The currency had broken out of the bearish triangle earlier and carved a meaningful resistance around 112.22 levels.
We remain focused on the hourly chart presented here, which clearly indicated that bears are in control until USDJPY stays below 109.85 levels. Look to sell higher towards 108.40 mark, against 109.85 levels, targeting below 105.00 respectively.
Short against 109.85, targeting below 105.00
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