Technical outlook:
USD/JPY dropped yesterday through the 102.96 levels before facing support again. The drop might be seen as a correction of the previous rally between the 102.87 and 103.90 levels respectively. The single currency pair is seen to be trading around the 103.12 levels at this point of writing and is expected to resume its rally until 102.87 remains intact.
Immediate price support is seen around 102.80 while resistance is at 104.00 (intermediary), followed by 105.50 levels respectively. The overall wave structure looks constructive for bulls but we need to see a breakout above 105.50 at least to confirm that a meaningful low is in place. The above daily chart structure also remains favorable to bulls until prices stay above March 2020 lows at the 101.18 levels going forward.
The entire rally between 101.18 and 111.75 has retraced to fibonacci 0.786 levels as depicted here. If bulls are to take control back, it should be from here. Any drop below 102.87 would test 102.50 and also 101.18 levels respectively.
Trading plan:
Remain long with stop @ 101.18, target is at 105.00, 109.00 and higher.
Good luck!
The material has been provided by InstaForex Company - www.instaforex.com