Technical outlook:
USDJPY continues to defy resistance and prints fresh swing highs close to 121.00 mark on Tuesday. The currency has hit fibonacci 0.382 extension at 120.95 as seen on the 4H chart here. If a turn does not appear from current levels, potential remains for yet another high towards 122.00 level, which if fibonacci 0.618 extension (not seen here).
USDJPY had broken out of its triangle consolidation over the last week pushing above 116.35 mark. The pair was trading within a barrier triangle with constant resistance at 116.35 and increasing support at 113.50, followed by 114.65 levels respectively. Prices have rallied in a thrust wave since then and might terminate soon as resistance should be strong here.
USDJPY need to break below 118.50 initial support to confirm a potential top is in place around 121.00 levels. Going forward, 116.35 zone is expected to provide support that was earlier acting as resistance. Traders might be waiting for a bearish confirmation before initiating fresh short positions here.
Trading plan:
Potential earish reversal to 118.50 and 116.35 against 123.00. Wait for confirmation.
Good luck!
