USDJPY has slipped through 113.40 lows since printing a meaningful top around 114.70 levels over the last week. The currency might be preparing to turn lower towards 109.15 levels in the next several weeks as bears are inclined to be back in control.
USDJPY has terminated a larger degree corrective rally ((A))-((B))-((C)) around 114.70 levels before turning lower. It has almost taken out the initial support, which is around 113.30 mark. It is expected to pullback through 114.10 mark in the near term before turning lower again.
Looking at the lower degree wave structure, USDJPY has carved an impulse wave between 114.70 and 113.40 levels. As seen on the 4H chart here, wave (i) seems to be complete around 113.40 levels and the currency is working to carve wave (ii) towards 114.10.
If the above proposed structure holds well, bulls might push prices higher toward 114.10-20 levels in the next 1-2 trading sessions. The currency could resume lower thereafter toward 112.00 levels as wave (iii) progresses.
Traders might remain poised to initiate fresh short positions around 114.00-10 region, with risk above 114.70 and potential target below 112.00 levels, going forward.
The Profinacademy.com Team
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