USDJPY: Short covering to continue by Reece Marini



The 1:1 (Light blue) initially offered solid resistance for the bears but there was limited follow through on the downside after the market failed to take out the 38.2 fib (Purple) at 117.000.

The bulls saw this as an opportunity to target the stops that were sitting just above the first 1:1 (Light blue) at 117.800 and again above the second 1:1 (light blue) at 118.000. The USD is now likely to continue to gain strength with the next solid resistance not until the 61.8 fib (White) at 118.900.



The intraday support to watch on the downside is the 1:1 (Purple) and 50 fib that coincide at 117.700, Buying around these levels with a 20 pip stops below 117.700 looks to be the best play going forward.

* A 1:1 refers to a current correction being equal in length to a prior correction

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