USDJPY slipped below $127.45 and registered a fresh low at the 124.35 mark on Monday before pulling back. The currency pair has now carved another downswing between 129.10 and 127.35 levels to be worked upon. Ideally, prices should hold below the 129.10 level to keep the bearish structure intact.
USDJPY is seen to be trading around 127.90 levels at this point in writing and might rally through the 128.40-50 zone before finding resistance again. Please note that 128.45 is also the Fibonacci 0.618 retracement of the downswing between 129.10 and 127.35 levels respectively. A high probability remains for a turn lower thereafter.
USDJPY needs to break below 125.00-10 initial support to confirm that a meaningful top is in place and bears are back in control. On the flip side, if the bulls are able to push above 129.10 from here, they might attempt another test above 129.40 before the bears are back. At the moment, pressure remains on the downward side until 129.10 and 129.40 are intact.
Trading plan:Potential drop through 125.00 against 130.00
Good luck!