In our previous analysis we mentioned that a bounce towards 109 and higher was very possible. Price responded bullishly at the Fibonacci support and at the trend line support. However price has now most probably formed a lower high and is preparing for a new downward wave towards the next major Fibonacci retracement level.
Red lines -Fibonacci extensions
Blue lines - Fibonacci retracement levels
USDJPY has already retraced 61.8% of the downward move from 111 to 107.50. Price has increased chances of a reversal from current levels and if the red support trend line is broken, we will have confirmation of the reversal and a new target of 106.30. At current levels we prefer to start turning bearish USDPY as there are increased chances of a coming reversal.