Technical outlook:

USDJPY raised through 135.40 last Friday, potentially testing its swing highs registered at 135.59 earlier. A failure to break higher from here will result in a sharp reversal lower towards 125.00 in the next few trading sessions. The bears will be poised to hold prices below 135.60 to keep the near-term structure intact.

USDJPY earlier dropped from 135.60 through 131.50, erasing over 400 pips in value, before producing a sharp pullback. If it is corrective, the recent rally will stay below 135.60. The bears might want to target the levels below 126.36, which is the initial support as marked on the 4H chart here. A break below 134.50 will encourage the bears.

USDJPY has been rallying since the 102.00 low, which was carved as a larger degree triangle termination earlier. The entire rally between 102.00 and 135.60 needs to be retraced before the next leg higher could resume. Prices must hold below 135.60 to keep the immediate bearish structure intact from here on.

Trading plan:

Potential drop through 125.00 against 136.50

Good luck!