Blue lines- Fibonacci retracement levels
A few days ago we warned traders that USDJPY was expected to make a reversal to the upside as a counter trend bounce towards 134-135. So far price has made a second higher high and a higher low while surpassing the 50% Fibonacci retracement of the entire decline. USDJPY next upside target is at the 61.8% retracement level at 136. It is very probable to see USDJPY test this level. This is very important resistance level. The RSI has still not reached overbought conditions. Bulls need to be very cautious as USDJPY could soon form an important lower high relative to the highs at 139.40.