FX.co ★ Trading plan for USDJPY for February 22, 2022

Technical outlook:

USDJPY has slipped through 114.50-60 levels in the early hours on Tuesday. The currency pair has hit the first fibonacci extension as depicted on the 4H chart here. We can expect some pullback before revering lower again and breaking below the 114.20 mark as seen here. The larger degree wave structure is pointing lower towards 112.00 levels at least.

USDJPY might have carved a potential Double Top reversal pattern as depicted on the chart here around 116.35 mark. The above bearish reversal pattern will be confirmed on a break below 113.40 mark. Prices would then accelerate lower to 112.50 and 109.00 levels respectively. Immediate price resistance is now seen around 115.20, while support is close to 114.20 levels.

As discussed earlier, potential remains for a pullback through 115.50 and close to 116.00 levels before bears are back in control. Ideally, prices would stay below 116.35-40 mark and keep the bearish structure intact. Even if prices break above 116.35, it would be shallow and bears might come back in control ahear of 117.00 levels going forward.

Trading plan:

Potential drop through 109.00 against 117.50

Good luck!