A Possible Corrective USD/JPY Drop To 112.00

The resistance at 114.50 unequivocally stopped the USD/JPY rally and the pair has moved to the downside with 180 pips for the past three days.

It is possible for the drop to deepen toward 112.00 or even toward 111.50.
Despite that, in my opinion the move to the downside is corrective and it is forming in order for the pair to gather liquidity. After it has ended I think we can expect a renewal of the rally to 118.50 or even to 122.00.

Of course, all those conclusions are based on the W1 time frame, which means that the assessment applies to the medium term.

Regarding my short term expectations, if we look at the H4 time frame we will see that we can expect a rally to 113.50 – 113.70 before there is an attempt to reach the first stronger support level at 112.50.