Technical outlook:
USDJPY has dropped through the 133.20 lows after hitting the high of 134.45 earlier on Thursday. The currency pair is seen to be pulling back through 133.80 at this point of writing and is expected to stay below 134.45. Bears will be inclined to hold prices below the 134.45 mark to keep the near-term structure intact.
USDJPY has produced an uptrend since breaking higher above the 116.35 triangle earlier. The rally looks complete and a potential high seems to be around the 134.50 level. If the structure holds well, bears will be back in the game from current levels and will drag the price towards the initial support of 126.36 in the next few trading sessions.
USDJPY's initial support is seen around the 132.30 mark (not labeled on the chart here), and a break below this level would be considered the first sign of a potential bearish reversal. On the flip side, if the price breaks above 134.45 from here, it could test 135.50 before terminating the trend and reversing lower again. Bottom line: Upside remains limited from here.
Trading plan:
Prepare to sell again.
Good luck!
