Technical outlook:
USDJPY climbed above 136.38 during the late New York session on Tuesday before finding mild resistance. The price action has been in line with projections as bears are expected to come back in control going forward. Prices should stay below the 136.70 interim resistance to keep the bearish structure intact.
USDJPY has carved a larger degree upswing between 102.59 and 136.70 since January 06, 2021. Bulls have remained in control in the past several months and it looks like they have carved a major top at around 136.70. If the above structure holds well, prices will stay below 136.70 and continue lower below 131.50 as projected on the 4H chart here.
USDJPY has further carved a lower degree downswing between 136.79 and 134.25 in the past few trading sessions. Furthermore, prices have retraced up to the Fibonacci 0.786 level seen at around 136.21. The high probability remains for a turn lower from here as bears prepare to come back in control. Watch out for a break below initial support at 131.50.
Trading plan:
Potential drop around 130.00 against 137.00
Good luck!
