Technical outlook:
USDJPY had raised through the 129.70-80 zone on Wednesday as projected, before hitting resistance and pulling back. The currency is seen to be trading close to 129.00 at this point in writing, looking to continue drifting lower. Bears would be keen to hold prices below the 131.34 mark and drag below 125.50 in the near term.
USDJPY is facing resistance around 130.80, followed by 131.34, while support is seen through 127.00, 125.00 and lower respectively. The currency has tested the Fibonacci 0.618 retracement of the recent drop between 130.80 and 127.50 which is seen close to 129.60 as projected on the 4H chart here.
A high probability remains for resumption of the down cycle. The price might continue towards 126.50 and 125.50 in the near term. Bears are set to remain in control until prices stay below 130.80, the initial resistance. Traders might be preparing to initiate fresh short positions now with risk broadly above 131.50 and the near-term target towards 126.50 at least.
Trading plan:
Potential drop through 125.50 against 131.50
Good luck!
