USD/JPY: technical outlook
USD/JPY corrected down to 118.70 after reaching levels above 119.00.
Analysts at Nomura point out that there were 3 waves of correction from Nov. 20th peak. The growth to 119.00 may be the final rising wave #5, but a break above this level will confirm a bullish flag and signal another leg higher. According to Nomura, a break below 117.05 is needed to say that the larger turn is taking place.
Some experts say that as options at 119 were taken out, the next target is at 119.50 and 120.00.
And a good comment from OCBC Bank: “Although rate differential movements argue for a topping out of the pair in the near term, expectations surrounding the polarized stance of the Fed vs. the BOJ may continue to see good support on dips.”
Short-term support levels are shown at the picture.