USDJPY is trading at 107.54 having pulled back from the 108.47 high it made last week. As we noted in previous analysis, we expect price to move lower towards 107. As long as price is above 106 bulls have hopes for the creation of a higher low.
Green rectangle – major support area
Red arrows – triple bottom
Blue downward sloping trend line – major resistance
USDJPY is expected to pull back towards the 38% Fibonacci retracement at least. The triple bottom around 104-105 gives bulls hopes for at least another push higher towards the blued downward sloping trend line resistance. However a descending triangle pattern is emerging here and this kind of patterns usually are bearish. A good risk reward level to go short would be near the blue downward sloping trend line resistance, if price goes there. Until then I prefer to be neutral as price has respected the green area support several times.
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