Previously, I thought the high for the USDJPY was in place and a correction was now underway. It still may be. Price is now at a critical juncture and the potential exists for one last marginal false break high. Let's examine the situation using the weekly chart.
USDJPY Weekly Chart
We can see there are currently two consecutive highs in place and there exists the possibility of a "three strikes and you're out" top to form. This is denoted by the numbers 1 to 3.
I have drawn a Fibonacci Fan which shows the second strike high was at resistance from the 23.6% angle. This occurred exactly as forecast and I believed that to be the final high. However, price has subsequently found solid support at the next 38.6% angle and a new high now looks to have real potential before price comes back down to break clearly below this 38.2% angle.
The Bollinger Bands show price finding support at the middle band and one last hurrah move back to the upper band looks to be on the cards.
The PSAR indicator shows price currently finding resistance from the dots which are just above price and will be around 125.30 this coming week. This is the critical juncture. Price busting above this level will most probably see price crack to new highs above 125.85.
The RSI show a triple bearish divergence already in place while one last marginal high would most likely set up a quadruple bearish divergence.
The Stochastic indicator is currently bullish although one solid week down would alter that.
The Momentum indicator show momentum declining since the first strike high so whichever way you look at it a correction is indeed imminent.
Summing up, price is now at a critical juncture with the potential for one last marginal high before a serious correction occurs. While I previously favoured the final high to be in place I now have doubts about that and would prefer to see one last high. Either way, this week should tell the tale.
