USDJPY has dropped through 104.34 lows yesterday, before pulling back. The currency trades around 104.70/80 for now and should be looking to push higher towards 107.00 levels in the near term. Bulls are expected to remain in control until prices stay above 104.00.
USDJPY might have found support around fibonacci 0.786 of the recent rally between 104.00 and 106.00 levels respectively. If the above structure holds well, 104.00 lows should remain intact and bulls back in control from here. Only a break below 104.00 might be delaying matters further.
Earlier, the currency had dropped through 101.18 lows before finding support. Since then, prices remained in control of bulls and managed to rally through 111.75 highs. Further, the drop to 104.00 was in 3 waves, hence corrective. Ideally prices should stay above 104.00 levels going forward.
Furthermore, USDJPY had found support from just below the fibonacci 0.618 retracement of the entire rally between 101.18 and 111.75 levels respectively. If the above holds well, we should see a rally that extends beyond 111.75 levels, going further.
Immediate resistance is seen towards 107.00, while support is around 104.00 respectively. A break above 107.00 would be encouraging for bulls and also confirm that a meaningful low is in place. Also note that bulls are here to stay for long if 104.00 remains intact.
USDJPY remains a good candidate to buy on dips from here and expect 107.00/50 resistance to be taken out in the near term.
Long against 104.00, targeting 111.75