Technical outlook:
USDJPY has been inching higher with the passing day and is now trading clise to 115.70 mark. It is worth noticing that the above price hike is accompanied by a strong bearish divergence in RSI on the 4H chart presented here. Bears might be poised to come back in control until prices stay below 116.35 mark.
USDJPY has reached the Fibonacci 0.382 extension of the counter trend rally, which is presented here in Red around 115.65. Please note that it is much close to 115.72, the Fibonacci 0.786 retracement of the primary downswing between 116.35 and 113.50 earlier. The above is a strong point of convergence for prices to reverse sharply lower. Watch out for a bearish candlestick pattern here for turn lower toward 112.50 mark.
The overall structure since 116.35 high is presenting a bearish picture as prices have retraced the primary downswing between 116.35 and 113.50. Also note that the counter trend rally has reached up to the backside of its past support turned resistance trend line around 115.65-70 zone. A turn here could be extremely sharp with target potential below 112.50 and 109.00 respectively.
Trading plan:
Potential drop through 112.50 and 109.00 against 117.50
Good luck!
