Technical outlook:
USD/JPY has managed to rally (probable impulse shown at (1)), past initial resistance at 107.10/20 levels. It also passed the initial trendline resistance into the buy zone, trading close to 107.00 levels at the moment.
Looking into the wave counts, a higher degree Wave (3) might be underway with waves 1 terminating yesterday around 107.25 levels. One can expect a corrective drop towards wave 2 around 106.31/35 levels before the 3rd of (3)rd wave resumes higher. If the above counts are valid, prices should remain at 105.75. Then the pair is likely to rally towards 109.60/70 levels breaking above the next resistance at 109.30 as depicted here. Immediate support is at 105.75, followed by 104.45, while resistance is seen at 109.31 respectively. Look to initiate long positions on dips towards 106.30 levels with risk below 105.70 for now.
Trading plan:
Long around 106.30/40, stop below 105.75 target is open.
Good luck!
