Correction of previous increases
USDJPY was today at its lowest level since Dec. 8. This means continuation of correction of the previous phenomenal growth impulse from the level of 101.19 to 118.66.
The current correction is very shallow. It has exceeded so far slightly abolition of the fibo 23.6%. While minimum goal of drops for each correction is level of 38.2% it is very likely that this is what will be the target of supply in the current downward movement of USDJPY. The level of 38.2% is combined with support located at the circular level of 112.00 which gives us a interesting confluence level. Of course it is difficult to determine whether or not the declines will be deeper, however, should not be shallower.
The likely scenario
The main scenario for USDJPY is currently movement towards 112.00. After the test of this level everything will depend on how much power will present there bulls and bears. With the weakness in demand, the downward movement can be continued, or on the contrary the weaknesses of supply may complete current correction and USDJPY will return to increases.