USD/JPY Began A Correction To The Downside

USD/JPY reached a strong resistance level in the 114.50 – 114.60 zone and, as it could’ve been expected, it began a correction.

For the moment, however, the pair is in no hurry to drop sharply and that is logical, considering that the limit of the wedge (in red) has not been reached yet.

In my opinion we could expect some correction on a smaller time frame, maybe on H1 or M30, after which the pair will continue rising toward 114.80 – 114.90.

As usual, the moment there were three points I drew two possible trend lines. The way the pair develops between them will show whether there will be any changes and what they will be.

In case there is a breakout below the support trend line, my supposition will need to be corrected. In that case the first target will be at 53 pips to the downside from the breakout level.

We should not forget that after (and if) the limit of the smaller of the two wedges is reached we will likely see a considerably deeper correction. There is also a second wedge (in blue), which, if it is drawn correctly, could lead the pair to around 119.60.