USDJPY reversed lower towards 109.60 on Friday, after testing 110.40 mark the day before. The currency pair continues to drift sideways and is expected to drop towards 107.50 levels until 110.80 remains intact, going forward.
USDJPY’s larger degree wave structure remains bullish towards 112.50 and higher to complete an (A)-(B)-(C) corrective rally, which began from 101.18 lows in March 2020. The currency pair seems to be unfolding Wave (C) rally since 102.59 low in January 2021.
Also note that Wave (C) might be subdividing into 5 waves before terminating around 112.50. Within Wave (C), USDJPY bulls are unfolding a larger degree Wave (5) since 108.75 lows or Wave (4) is still unfolding.
If USDJPY drops below 109.00 and subsequently 108.75, high probability remains that Wave (4) is still unfolding and it could terminate around 107.50 levels. The pair could then resume higher towards 112.50 to terminate Wave (5) and complete the entire structure.
Traders might be preparing to initiate fresh short positions around 110.00 mark against 110.80 with a potential target around 107.50 levels in the near term. Bulls might remain poised to take control back thereafter.
Prepared by
The Profinacademy.com Team
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