[B]Commentary[/B]: We wrote yesterday that “intraday charts show a head and shoulders pattern forming from the beginning of June as well. The pattern is confirmed on a break below 120.75. The next level of support would be the 50% fibo of 115.14-124.13 at 119.64.” The USDJPY broke below the neckline and is currently testing the line as resistance. From an EW standpoint, a double zigzag may be unfolding from 124.13. The first a-b-c decline (wave W) is from 124.13-120.97.
Wave X is from 120.97-122.60 and wave Y is underway now (will either be an a-b-c or i-ii-iii-iv-v). Waves W and Y would be equal at 119.45, very close to the mentioned 50% fibo at 116.64 and 1 pip away from the 5/11 low at 119.46. We are looking for a decline to this level.