USDJPY dropped to 127.58 low intraday on Thursday in the past hour and remains shy by a few pips from the previous swing low at 127.51. The currency pair is set to drop through 125.50 in the near term as bears are looking to remain in control. Prices rallied through 128.95 in the early Asian session before reversing lower again.
USDJPY is seen to be trading at around 128.80 at this point in writing and is expected to continue dragging lower toward the projected Fibonacci targets as seen on the chart. Immediate price resistance is seen around 129.00, followed by 129.80 and higher; while interim support comes around 127.50 respectively.
A break below 127.50 will accelerate the move towards 127.00 and 125.50 as bears are tightening their grip further. On the flip side, a break above 129.00 would re-test the 129.70-80 levels before reversing lower again. Overall, the strategy continues to remain a sell on rally until prices stay below the 131.34 mark. Traders are poised to hold short positions for now.
Trading plan:Potential drop through 125.60 against 131.34
Good luck!