USDJPY seems to have carved a higher low around 105.00 levels today. The currency has reversed sharply from 105.10 lows and managed to produce an engulfing bullish candlestick pattern on the 4H time frame. Bulls might be inclined to take control back from here on.
USDJPY probable wave counts are as follows: The currency might have completed a bullish triangle at a higher degree, termination around 104.20 mark. Looking at the medium term wave structure, the currency seems to be preparing for a rally through 110.00 levels.
USDJPY had rallied from 101.18 through 111.75 levels earlier carving a meaningful upswing. The subsequent drop was corrective (3 waves) A-B-C, which finally terminated around 104.20 levels earlier. If the above holds well, USDJPY should stay above 104.20 mark.
Further, it should continue rallying higher towards 110.00/50 levels. Immediate resistance is seen around 107.50 and 108.00 respectively. A push through those resistance levels will confirm further upside in USDJPY.
Also note that prices have stalled around fibonacci 0.618 of the recent upswing between 104.20 and 107.10 respectively. If bulls are able to hold above 104.20 levels, USDJPY should be heading towards 108.00 and 110.00 levels, going further.
Traders might remain poised to initiate fresh long positions around current levels (105.10/50), with protective stops just below 104.20 and projected targets as 108.00 and 110.00 respectively.
Technical Analysis Team
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