Technical outlook:
USDJPY rallied through 116.19 highs during early hours of trade on Thursday. The wave structure still remains bearish until prices stay below 116.35 mark as bears remain inclined to be back in control from here. A break below 115.60 will confirm that a lower top is in place around 116.19 and that prices are dragging lower towards 114.40 at least.
USDJPY could drop towards 113.50 and 112.50 in the next few trading sessions. The potential double top reversal pattern will be confirmed on a break below 113.50 mark, going forward. Alternatively, the currency pair is drifting sideways within a rising wedge since 116.35 highs. If the alternative scenario unfolds, prices could break above 116.35 mark producing a thrust wave higher towards 117.50.
USDJPY needs to break below 114.40 initial support at least, to rule out any further upside or triangle breakout. Even if prices break higher above 116.35 mark, upside remains limited and bears might be back in control sooner than expected. Either way, expect a bearish reversal from here or from 117.00-50 mark.
Trading plan:
Potential drop through 109.00 against 118.50
Good luck!
