USD/JPY might be preparing to turn lower after printing lower high around 115.85 levels on Tuesday. A break below 115.00 will confirm that the currency pair is on its way toward 114.20 and lower. On the flip side, the possibility remains for yet another high above 115.85 before finding resistance. Please note that the structure remains bearish below the 116.35 mark.
USD/JPY is supported at 114.20, followed by 113.50, while resistance is strong around the 116.35-40 mark. A potential double top might be unfolding with bulls failing to penetrate above 116.35 as depicted on the 4H chart here. The downswing between 116.35 and 113.50 still remains intact and potential targets are pointing towards 112.50 near term.
USD/JPY will begin to accelerate lower on a break below its immediate trend line support and 115.00 interim lows. Furthermore, a break below 114.20 would confirm that bears are back in control and are here to stay for long. The double top formation will be confirmed in a break below the 113.50 mark.
Trading plan:Potential drop towards 112.00 and 109.00 against 117.00
Good luck!