FX.co ★ Trading plan for USDJPY for February 09, 2022

Technical outlook:

USDJPY has been testing the backside of its past support turned resistance trend line around 115.40-60 zone over the past twe trading sessions. A bearish reversal is expected from current levels and drag prices lower towards 12.50 mark at least. Only a consistent break above 116.35 highs will change the structure to bullish over the near term.

USDJPY had earlier rallied through 116.35 mark before finding strong resistance. Prices have dropped through 113.50 mark since then, carving a meaningful downswing. The above bearish boundary has now been retraced up to fibonacci 0.786 levels around 115.60-70 and is now expected to turn lower towards 112.50 and 109.00 respectively.

A conventional Head and Shoulder bearish reversal pattern might be unfolding with Head at 116.35, Neckline around 115.00-10 and Left Shoulder seen around 115.50 mark respectively. Now, the Right Shoulder also seem to be in place around 115.60-70 zone. If correct, the above calls for a dramatic bearish reversal ahead.

Trading plan:

Potential drop through 112.50 and 109.00 against 117.00

Good luck!