USDJPY is testing its recent swing lows around 104.02, over the last week before resuming higher again. The currency trades around 104.30 for now and is expected to stay above 104.00 mark. Bulls should remain poised to push through 106.00 and 107.00 in the near term.
USDJPY faces immediate resistance around 106.00, followed by 107.00 respectively, while intermediary support is seen towards 104.02 levels respectively. A push through 106.00 will confirm that bulls are back into control and a meaningful low is in place around 104.02.
The overall medium term structure is still constructive for bulls until prices stay above 101.18 lows. USDJPY had rallied from 101.18 through 111.75 levels in March 2020. The boundary was retraced by a corrective drop towards 104.00 recently.
Also note that the corrective drop found support just below the fibonacci 0.618 retracement at 105.20 levels. High probability remains for the A-B-C drop to be complete around 104.00 levels, and that a bullish reversal should be on its way.
Alternately, a drop below 104.00 could possibly find support around 103.50 levels, which is fibonacci 0.786 retracement of the entire rally between 101.18 and 111.75 respectively. The proposed rally might be delayed if the alternate count unfolds.
USDJPY remains a good candidate to be bought around 104.40/50 levels and we should see prices breaking above 106.00, 107.00 levels in the near term.
Long against 104.00, targeting 107.00 in the short term.