USDJPY seems to have formed a potential low around 104.20 levels, over the last week. The currency had raised through 106.50 levels before pulling back. Bulls are looking poised to remain in control going forward and push through 110.00 levels.
USDJPY probable wave counts are as follows: We present an alternate scenario, which is looking bullish. The rally from 101.18 through 111.75 could be an impulse wave, marked as Wave (1). Ideally, an impulse is followed by a corrective wave in the opposite direction.
USDJPY might have completed the corrective structure A-B-C around 104.20 levels last week. This could be potential Wave (2). Also not that Wave (2) found support just below the fibonacci 0.618 retracement of Wave (1).
Furthermore, as expected, USDJPY has produced a bullish turn from 104.20 levels. The currency has rallied over 230 pips touching 106.50 levels before retracing lower again. The currency pair is expected to find support around 105.00 levels.
If the above larger degree wave counts hold true, USDJPY should stay above 104.20 levels and proceed higher towards 107.86 and 110.00 respectively. Immediate resistance is seen towards 108.15 levels and a break higher would be constructive for bulls.
Traders might be poised to initiate fresh long positions around 105.00/50 mark with protective stops below 104.00 and projected targets towards 110.00 levels. Only a break below 104.20 would threaten to break below 101.18 going forward.
Technical Analysis Team
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