Technical outlook:
USDJPY managed to rally through 115.20 levels during the New York Session on Tuesday. The move is in line with expectations after hitting a fibonacci target around 114.50 earlier. Please note that the recent rally could push through 115.30-50 zone before finding resistance and resuming lower again. The next potential target is seen through 114.20 levels.
USDJPY might be working on the recent downswing between 115.90 and 114.50 levels. The Fibonacci 0.618 retracement of above boundary is seen towards 115.30-40 zone. High probability remains for a turn lower if prices managed to push through that zone. Immediate price resistance is seen at 115.90 and bears will remain in control until they hold lower.
USDJPY has carved a potential double top bearish reversal pattern around 116.35-40 zone as seen on the 4H chart here. A break below 113.40 will confirm the above double top formation. Please note that potential remains for a push through 112.50 levels in the near term and up to 109.00 levels going forward.
Trading plan:
Potential drop through 112.50 and 109.00 against 117.00
Good luck!
