FX.co ★ Trading plan for USDJPY on May 16, 2022

Technical outlook:

USDJPY had carved a potential low at around 127.51 over the last week before finding support and pulling back. The currency pair has rallied through 129.60 as projected earlier. It is now expected to find strong resistance (129.50-60 zone) as bears will be inclined to come back in control. Watch out for a potential bearish reversal ahead of 130.80.

USDJPY seems to have completed its counter-trend rally around 129.60 early on Monday. Also, note that 129.60 is the Fibonacci 0.68 retracement of the recent downswing between 130.80 and 127.51. A high probability remains for a bearish turn towards 127.00, 126.50, and 125.60 in the near term.

USDJPY might still push higher through the 129.80-90 zone to terminate the proposed counter-trend. Please note that the trend line resistance is seen passing through 129.90 and could turn prices lower again. Also, note that the past support-turned-resistance zone is seen through 129.90, which could push prices lower again.

Trading plan:

Potential drop through 125.50 against 132.00

Good luck!