USDJPY had dropped yesterday close to 105.80 mark as the currency consolidates within a potential triangle, highlighted o the 4H chart here. Bulls might remain in control as long as prices hold above 104.20 levels and would target 107.50, 108.20 and higher levels, going forward.
USDJPY probable wave counts are as follows: The currency pair has been consolidating within a potential triangle at a larger degree. The price action has been in 3 waves recently and they are highlighted here. The rally between 101.18 through 111.75 could be seen as an A-B-C.
Further, the subsequent drop between 111.75 through 104.20 has also unfolded into 3 waves A-B-C. Ideally, another push towards 111.75 levels remain possible in 3 waves. This would complete a larger degree Wave (C) within the triangle structure.
A triangle is a corrective wave, which consists of 5 waves labelled as A-B-C-D-E. Each wave is sub divided into 3 waves, a-b-c respectively. If the above count holds well, USDJPY could push towards 111.75 and higher to complete Wave (C) within the larger triangle structure.
Immediate support is seen at 104.20, while resistance is around 107.50, followed by 108.15/20 levels respectively. A break above 107.50 would confirm that bulls are back in control and USDJPY is heading towards 108.50 and 110.00 respectively.
Traders might prepare to initiate fresh long positions around 105.80/106.00 potential support zone, with protective stop below 104.20 and projected targets towards 107.50, 108.15 and higher respectively.
Technical Analysis Team
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