USDJPY testing major resistance, potential drop!

USDJPY is approaching our first major resistance at 107.14 (100% Fibonacci extension level, horizontal swing high resistance, 38.2% and 50% Fibonacci retracement level). We believe this is a major resistance zone as it coincides with the long term descending resistance line. A strong reaction could occur at this level, pushing price down to the next major support at 106.40 (61.8% Fibonacci retracement level, horizontal swing low support). Upon breaking this level, we could see the next major support at 105.56 (swing low support, fibonacci extension).

Stochastic (21, 5, 3) is approaching its major resistance at 90%. A corresponding drop might occur at this level.