USDJPY might have carved the last leg of a potential triangle consolidation around 105.26 levels. The currency is trading above 105.35 for now and might be preparing to resume its rally. Please note that bulls might remain in control until prices stay above 104.20 levels.
USDJPY had rallied from 101.18 lows through 111.75 high in March 2020 (not seen here on the chart displayed). Furthermore, the entire rally was retraced by a corrective drop towards 104.20 levels. Please also note that fibonacci 0.618 support was seen around 105.20 levels.
The bullish bounce from 104.20 levels near fibonacci 0.618 adds further confidence to the above bullish setup. Therefore, it could be safe to conclude that USDJPY might remain in control of bulls until prices stay above 104.00/20 broadly.
In terms of projected targets, USDJPY should eventually push through 111.75 highs to complete the medium term structure. Please also note that the current wave structure might be a part of a larger degree triangle unfolding. Ideally, bulls should push through 111.75 in the next few weeks.
Immediate support remains fixed at 104.20 levels and resistance is seen through 107.50, followed by 108.20 and higher respectively. A push through 107.50 would confirm bulls are back in control and are here to stay for long.
Traders might be willing to initiate fresh long positions now (105.30), with a protective stop below 104.00 and projected targets towards 107.50 and higher.
Technical Analysis Team
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