Technical analysis for the USD/JPY, the pair reached the third target of the third daily bullish wave at 2.272 FIB extension at 111.65 and the 0.618 FIB retracement at 112.00 on the monthly chart and started a pullback. This pullback reached support at 0.386 FIB retracement between 110.80-110.95 and bounced from it.
The focus now is on the resistance between 111.65-112.00, a break above that range will send the USD/JPY pair higher. The first target for this potential breakout is the resistance at 112.25 and the second is the 2.618 FIB extension at 112.70, which is the fourth target of the third bullish daily wave. Therefore, 112.70 should hold the bulls and bring meaningful pullback. If eventually, the USD/JPY pair, breakout above 112.70, that will open the door for a bullish run toward the resistance at 114.50.
On the other hand, if the USD/JPY pair breaks below 110.80, that will open the door for further declines toward the 0.618 FIB retracement at 110.25.
We need to watch the bearish flag in the weekly and the daily chart, breakout of this pattern will have bearish implications for the USD/JPY.