After a steep rally from 94 to 100.86, USDJPY has broken today the upward sloping trend channel. This signals the end of the upward move from 94 and the start of a downward correction. How much and how steep prices are going to fall, will also determine the degree of the correction to come.
The above chart shows the potential bottoming targets. The Fibonacci retracements at 50% and 61.8% levels are the most possible targets where this pair will find support. If however prices fall below the 76.4% support, the bullish scenario will be in danger as the possibilities of a larger degree correction will have increased. If prices manage to break below 94, this bearish scenario will be confirmed, with targets as low as 92-93 where the longer term upward channel provides support.
The longer term upward channel has support at 92-93 level. If prices now break below 95.37, there will be increased chances to break below 94 and then reach 92-93. For now we prefer the bullish scenario that sees only a small correction towards 98-97 and then up again.
As always, thank you for taking the time to catch up on my thinking.