Technical outlook:

USDJPY dropped through 126.55 on Thursday after hitting the 127.50-60 mark on Wednesday. The drop has been quite sharp but the price failed to take out the 126.36 swing low carved early this week. The currency pair is still looking to rally through the 129.40-50 mark to complete its Bearish Gartley before resuming lower again.

USDJPY has carved a lower degree downswing between 131.34 and 126.36, as seen on the 4H chart here. Also, note that initial support has been taken out at 127.00. Ideally, prices should produce a corrective rally through the 129.40-50 mark, which is the Fibonacci 0.618 retracement of the above drop.

USDJPY also carved an upswing between 126.36 and 127.60 early this week. Since then, the price has retraced through 126.55. If the above structure holds well, the currency pair should produce a sharp rally towards the 129.40-50 mark in the next few trading sessions. Also, note the Fibonacci convergence around the 129.50 zone making it a highly probable reversal zone.

Trading plan:

Potential rally through 129.40-50, then lower towards 124.00 and further.

Good luck!