USDJPY has dropped sharply towards 109.33 lows after printing highs around 110.80 levels over the last week. High probability remains for a bullish reversal from here towards 112.50 levels before finding resistance again.
USDJPY bulls are looking poised to be back in control soon but if prices drop below 109.30 levels, probability remains to drop towards 107.50 levels before resuming its rally. Also note that prices are testing the back side of past resistance trend line, which could be potential support zone.
Looking at the wave structure, USDJPY is unfolding a larger degree corrective wave (A)-(B)-(C) since 101.18 lows in March 2020. Furthermore, Wave (C) is in progress since 102.59 low registered on January 06, 2021.
Within the proposed 5 waves rally to terminate Wave (C) higher towards 112.50, USDJPY might be producing a larger degree Wave (5) since 108.70 lows as marked on the 4H chart here. On the flip side, USDJPY might be producing a triangle before turning higher again.
Either way, bulls might be preparing to stage a rally from current level (109.10/40) or from a bit lower towards (107.40) levels and push through 112.50 mark at least.
Prepared by
The Profinacademy.com Team
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