USDJPY seems to have carved a meaningful bottom around 104.80 levels yesterday post FOMC. The currency pair is trading above 105.00 handle for now and bulls might remain poised to push higher from here. A break above 105.70 confirms.
USDJPY has carved a corrective drop since 111.75 levels, which could be seen as an A-B-C (not labelled). The drop from 111.75 through 106.00 as potential Wave A, subsequent rally towards 109.85 as Wave B and the recent drop towards 104.80, as Wave C respectively.
If USDJPY continues to drop further from here, the structure might turn an impulse and prices could drag lower towards 101.18. But a bullish bounce from here would confirm that the above drop was just a correction and that USDJPY is set to resume higher.
Also note that USDJPY has found interim support around 104.80 levels, which is fibonacci 0.618 retracement of the entire rally between 101.18 through 111.75 earlier. Bulls should remain poised to produce a reversal here.
If the above wave structure holds well, USDJPY might resume higher from here and push towards 111.75/112.22 levels in the next several weeks’ time. Alternately, a continued slip below 103.00 would confirm that it is heading below 101.18 levels.
It would be a good strategy to plan to turn bullish on a break above 105.70 levels, which is immediate resistance from here.
Long against 104.20, targeting above 111.75.