Keeping in mind what we have posted during these days, it appears as if USDJPY has bottomed to the level we expected 107.69 (our target 107.75).
These days USDJPY should be entering into correction, unless yesterday’s low is broken.
Target for wave 4 top is at 38% Fibonacci retracement, which corresponds to another important level (100% Fibonacci Extension of wave 1 with wave 2).
For our short swing, Invalidation point should be at the bottom of wave 1, however we will not adjust stops yet and let the market play out.
As shown in the chart below, yesterday’s bottom was followed by an impulsive wave, which leads us to believe that it might be wave A of 4.
It is usually dangerous playing corrective waves due to their ability to make new lows (B wave) getting us stopped, without invalidating the bigger picture. However we will keep tight stops and enter multiple times.
A possible trade setup would be to enter long in a pullback with stops in yesterday’s low.