FX.co ★ Trading plan for USD/JPY for May 06, 2022

Technical outlook:

USD/JPY rallied through 130.80 during the early Asia Session on Friday before easing off. The pair erased its losses incurred after the FOMC meeting on Wednesday. It rose by 200 pips from 128.60. It is quite possible for prices to push through 131.25 intermediate resistance, before reversing lower again. A failure to break 131.25 will be considered encouraging to bears.

USD/JPY broke earlier out of its triangle consolidation and pushed through the resistance level of 116.35. Since then it has remained in control of bulls sagging a rally of over 1,500 pips. The rally looks to be complete at 131.25 or soon terminate above that mark as a meaningful retracement could be underway soon.

Bears are still inclined to be back in control from here and pish the pair below 127.00 initial support. If the scenario comes true, it could be seen as the first sign of a potential trend reversal. Until that happens, the currency could push through the 131.25 mark and up to 132.00 levels near term.

Trading plan:

Potential drop to 127.00 against 132.00

Good luck!