USDJPY had dropped through 103.60/70 levels yesterday, before finding support. The currency trades around 103.90 for now and might be preparing to turn higher again. If bulls are back in control from here, we might witness a sharp rally through 107.00 and further.
USDJPY had earlier produced a Morning Star bullish reversal candlestick pattern from 103.18 lows. The rally extended through 105.65 levels before pulling back. The currency seems to have found potential support around fibonacci 0.786 retracement at 103.65.
USDJPY bulls might be poised to resume higher from current levels and target resistance at 106.00, 107.00 and further, in the next few weeks. Bottom line is that prices must stay above 103.18 to keep the bullish structure intact.
USDJPY medium term structure is also looking bullish with larger degree Wave (A) and (B) in place around 111.75 and 103.18 respectively. Also note that Wave (B) had terminated around fibonacci 0.786 retracement of Wave (A) at 103.18 earlier. If the above holds well, a potential Wave (C) rally might be underway towards 111.75 levels at least.
USDJPY bulls might be preparing to push above 111.75 mark to complete the (A)-(B)-(C) structure, going forward. A push through 106.00 would also bring prices into the buy zone of the down trend line, which would be encouraging for bulls.
USDJPY remains a good candidate to be bought from current price action 103.85/90, after having bounced off the fibonacci 0.786 retracement yesterday.
Ling against 103.00, target is 107.00, 109.00 and further.