Daily Pivots: (S1) 110.49; (P) 110.70; (R1) 111.05; More…
USD/JPY surges to as high as 111.34 so far today. Break of 111.13 suggests resumption of rise from 108.10. Intraday bias is now on the upside with focus on 111.39 key resistance. Decisive break there will resume whole rally from 104.62 low. That will also add credence to the case of medium term reversal and target 114.73 resistance for confirmation. On the downside, however, break of 110.34 will indicate near term reversal. And, the consolidation pattern from 111.39 would then start the third leg for 108.10 again before completion.
In the bigger picture, at this point, we’re slightly favoring the case that corrective decline from 118.65 (2016 high) has completed with three waves down to 104.62. Above 111.39 will affirm this view and target 114.73 for confirmation. However, it should be noted that USD/JPY is bounded in medium term falling channel from 118.65 (2016 high). Sustained break of 61.8% retracement of 104.62 to 111.39 at 107.20 will likely resume the fall from 118.65 through 104.62 low.
