USDJPY rose through 128.33, hitting the first Fibonacci extensions as seen on the 4H chart, during the New York Session on Monday. The currency pair is expected to ease off a bit towards 127.10 before resuming higher again.The potential upward target remains 129.40-50 in the next few trading sessions. Bears would be back in control thereafter.
USDJPY is unfolding a counter-trend a-b-c rally towards 129.40 as highlighted on the chart. It is working to retrace its earlier larger degree drop between 131.34 and 126.36. The structure unfolding is a standard flat (3-3-5), within which wave a has terminated at around 128.30. If the above is correct, wave b should be underway soon.
USDJPY bulls are targeting the 129.40-50 levels in the near term, which are also passing close to the Fibonacci 0.618 retracement of the entire drop between 131.34 and 126.36. A high probability remains for bears to take control since it is the Fibonacci point of convergence. Traders prepare for a short-term rally and then a turn lower again.
Trading plan:Potential short-term rally towards 129.40-50, then lower against 131.34
Good luck!