Commentary: We wrote yesterday that “the risk of a reversal is high as the USDJPY closes in on 118.00. 118.12 is the 100% extension of 111.59-117.12/112.59.
A rally to 118.12 would possibly complete larger wave 2 within a 5 wave bear cycle that began at 124.13.” If the decline from 117.93 unfolds in 5 waves, then we will look to get bearish on the pullback. At this point, the decline appears to be in wave iii of 1. A bearish bias is warranted against 117.46.
Written by Jamie Saettele, Technical Currency Strategist for DailyFX.com