USDJPY seems to have resumed its rally after having carved a higher low around 105.10 mark. The currency has managed to inch higher towards 106.40 until now and should be looking to continue. Bulls are looking poised to push through 110.00 and beyond, going forward.
USDJPY probable wave counts are as follows: The rally from 101.18 through 111.75 could be Wave (A) of a higher degree. The subsequent drop towards 104.20 could be labelled as Wave (B) as the drop unfolded into 3 waves, labelled as A-B-C on the chart here.
If the above proposed wave structure holds well, USDJPY should rally and terminate above 111.75 as Wave (C) of a similar degree unfolds. Also note that prices should ideally stay above 104.20 mark, going forward.
Immediate resistance is seen towards 107.50, followed by 108.15 and 109.85, while support stays around 104.20 respectively. Bulls must be looking poised to push through 107.50 levels in the near term. Bottom line remains the 104.20 mark.
USDJPY could be unfolding a triangle at a larger degree before breaking out (not seen here). The overall trend remains bullish over the long term. In the medium term though, bulls would be targeting to print above 111.75 levels.
Traders might be inclined to hold long positions taken around 104.50/105.00, with protective stops below 104.20 and projected targets towards 110.00 and 111.75 respectively. Only a break below 104.20 would delay matters.
Technical Analysis Team
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