USD/JPY has been range trading for an extended period of time if we look at the 1H timeframe. The price has been crossing a 200 Moving Average a number of times showing no signs of a trend.
But the recent price action shows that the pair started to produce lower lows and lower highs suggesting that bears could be starting to take over. In addition, the ascending Fibonacci channel breakout confirms the bearish scenario, where, after the breakout, the price found resistance and the lower trendline of the channel. The Fibonacci retracement applied to the first corrective wave after the channel breakout is pointing to a few potential downside targets, one being 261.8% and another 361.8% accordingly.
Consider selling USD/JPY on any pullbacks towards R1 (11.75) resistance or on the S1 (112.45) breakout. The stop loss should be just above the high produced near R1. The final target is the S3 (111.50) area.
Support: 112.45, 112.00, 111.50