Technical outlook:
USDJPY grew to the 103.00 mark in the early hours on Friday only to find resistance again. The currency pair is seen to be trading close to 129.80 at this point in writing and it is expected to drag lower from here. Bears might be poised to hold prices below 131.34 to keep the near-term structure intact.
USDJPY's overall wave structure is presenting a bearish outlook against 131.34. The currency earlier dropped between 131.34 and 126.36 carving a lower degree downswing. Furthermore, prices have retraced from the above downswing though the Fibonacci 0.786 levels around 130.24 earlier this week.
If the above structure holds well, USDJPY bears will be inclined to come back in control and drag prices sharply lower towards 125.00 and 121.00 going forward. A slip below 127.70 will potentially confirm that a meaningful lower top is in place around 130.24. Traders might prepare to enter the market with fresh short positions from current levels (129.85).
Trading plan:
Potential drop through 125.00 against 132.00
Good luck!
