USD/JPY Could Possibly Drop Below 108.00

Although the pair reached the support trend line, so far there is no signal that the drop is over.

On the H4 time frame we can see that there is a flag forming, with a height at its base of about 108 pips, which means that after a breakout below the support trend line we could expect another move to the downside for 108 pips. Or, if we follow the support trend line of the channel, we could expect that the pair will fall to 107.70.

One cannot say with certainty that this is the end of the drop, but either way, if we examine the weekly time frame, where we can see that there are three waves that have formed to the downside, starting from 118.606 (1st January 2017) until today (especially considering that the first two downward waves are about the same length, with the first being slightly longer than the second) one could say with increasing confidence that the moment where a higher correction or even a renewal of the upward trend will begin is getting closer and closer.