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

Technical outlook:

USD/JPY rallied through the 131.00 level on Friday before pulling back. The pair is facing strong resistance around the 131.35 mark. Prices are expected to stay lower. Only a consistent break above 131.35 would change the proposed bearish structure. A break below 129.60 will confirm a lower top and bring back bears into action.

USD/JPY has probably completed its counter trend rally, which had begun from 126.36 lows. If the above structure holds well, prices will stay below 131.34 and reverse sharply lower through 123.50 and beyond in the next several trading sessions. A drag below 126.36 will accelerate the proposed drop as bears firm their grip.

USD/JPY had earlier dropped between 131.34 and 126.36, carving a meaningful downswing. Furthermore, it broke below the support level of around 127.00 before producing the counter-trend rally. Bears are likely to be back in control from here and drag prices below 126.36 in the next few trading sessions.

Trading plan:

Potential drop to 123.50 against 132.00

Good luck!