Technical outlook:

USDJPY has finally reversed after printing lows at 102.59 on January 06, 2021. The currency pair is seen to be trading around 103.85 levels at this point in time and is expected to retrace lower, before resuming its rally. Immediate resistance is seen at 105.65 while support is now fixed around 102.59 levels respectively.

A push through 105.65 would confirm a meaningful bottom in place and that bulls are back in control. Looking at the overall structure, it could be constructive for bulls as long as prices stay above 101.18 lows registered in March 2020. The rally between 101.18 and 111.75 has now retraced just below the fibonacci 0.786 levels around 102.59 levels.

If the above bounce holds well, USDJPY bulls might be inclined to push above 111.75 in the next several weeks. Also note that the daily chart has produced an engulfing bullish candlestick pattern as well, indicating potential trend reversal ahead.

Trading plan:

Remain long, stop @ 101.18, target is 111.75

Good luck!