USD/JPY Technical Analysis: Double Top Unveil Trends and Targets for Strategic Trading

In our USD/JPY technical analysis, a significant development unfolds as the pair forms double top on both the weekly and monthly charts, triggering a retracement. Delving into the intricacies, we explore key targets and potential scenarios for informed trading decisions.

Bearish Momentum: Targets for Retracement

1. Primary Target: 0.382 FIB Retracement (Weekly) – 142.45 The initial phase of the retracement sets its sights on the 0.382 Fibonacci retracement on the weekly chart, strategically positioned at 142.45. This level has already been reached.
2. Secondary Target: 0.618 FIB Retracement (Weekly) – 136.65 Advancing further, the second target is the 0.618 Fibonacci retracement on the weekly chart, identified at 136.65.
3. Tertiary Target: 0.786 FIB Retracement (Weekly) / 0.382 FIB Retracement (Monthly) – 132.70 The third target aligns with the 0.786 Fibonacci retracement on the weekly chart, corresponding to a 0.382 Fibonacci retracement on the monthly chart, situated around 132.70.
4. Quaternary Target: Previous Monthly Low – 127.22 The fourth target is set at the previous monthly low of 127.22, representing a 1.618 Fibonacci extension on the weekly chart and slightly above the 0.500 Fibonacci retracement on the monthly chart.

Potential Bounce Levels: Upside Considerations

1. Primary Bounce Level: 0.382 FIB Retracement (Weekly/Daily) – 144.70 In the event of a bounce, key levels to monitor include the 0.382 Fibonacci retracement on both the weekly and daily charts, positioned at 144.70.
2. Secondary Bounce Level: 0.618 FIB Retracement (Weekly/Daily) – 147.50 Further upward, the 0.618 Fibonacci retracement on both the weekly and daily charts stands out as a potential bounce level, located at 147.50.

Bullish Potential: Breaking Above Double Top

1. Bullish Breakout Signal: Above Double Top – 151.94 A break above the double top on both the weekly and monthly charts, notably above 151.94, signals the potential initiation of a bullish run.
2. Bullish Targets: 0.500 FIB Retracement (Monthly) – 177.00 If the bullish momentum prevails, the first target is set at the 0.500 Fibonacci retracement on the monthly chart, positioned at 177.00.

As we navigate the dynamics of USD/JPY, understanding these critical levels and potential breakout points provides traders with valuable insights for strategic decision-making in the evolving currency market.

Weekly chart:

Monthly chart: