USDJPY might be preparing to extend its counter trend rally through 114.00-40 zone before reversing lower again. Bears have already broken initial support around 112.75 on November 30. Ideally a pullback should be produced before bears are back in control.
USDJPY prices rallied through 113.65-70 zone on Friday, reaching fibonacci 0.382 retracement of the recent drop between 115.52 and 112.50. A push through 113.65 will open the door to further test 114.00-50 zone before facing strong resistance.
The drop between 115.52 and 112.50 looks impulse, potential lower degree wave I (not labelled). Ideally, a corrective wave should be produced as lower degree wave ii, before wave iii resumes lower toward 106.00-107.00 level.
USDJPY has carved a larger degree corrective rally between 101.18 and 115.52 levels. The above has been marked as ((A))-((B))-((C)), partially viewed on the chart here. The currency is now preparing to produce a similar degree corrective drop against 115.52.
If the above structure holds well, USDJPY would be on its way toward 106.00-107.00 soon. Traders might be inclined to hold short positions against 115.52 mark with potential target below 107.00, going forward. Watch out for 114.00-50 zone to be tested as the week progresses.
The Profinacademy.com Team
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