Commentary: We wrote last week that “the USDJPY is likely to subdivide in a 5th wave before a correction. In other words, now is not the time to get bullish. Overbought and divergent RSI along with channel resistance indicate the potential for a pullback.”
That pullback is underway right now. There is potential now for a drop to the support line, drawn off of the 4/19 and 6/8 lows, near 122.15. The longer term bull trend is bullish above 120.76. “It is our working assumption that the USDJPY is working higher in a C wave towards the 128.00 area over the next few weeks/month. The 78.6% of 135.13-101.67, the 100% extension of 108.98-122.17/115.14, and the 100% extension of 101.67-121.39/108.98 are between 127.97 and 128.70.” Strategy: None