USD/JPY rose to 111.13 last week and breached 61.8% retracement of 114.54 to 104.69 at 110.77. But the pair couldn’t sustain above 110.77 and retreated. Initial bias is neutral this week first. On the downside, break of 110.00 resistance turned support will suggest rejection by 110.77 and the rebound from 104.69 has likely completed. Intraday bias is turned back to the downside for 108.49 support for confirmation. Nevertheless, break of 111.13 should confirm resumption of rise from 104.69 for 114.54 resistance.
In the bigger picture, while the rebound from 104.69 was stronger than expected, it couldn’t sustain above 55 day EMA yet. Outlook is turned mixed first. On the downside, break of 108.49 support will revive that case that such rebound was a correction. And, larger down trend is still in progress for another low below 104.62. But sustained trading above 55 day EMA will turn focus to 114.54. Decisive break there will confirmation completion of the decline from 118.65 (2016 high).
In the long term picture, the rise from 75.56 (2011 low) long term bottom to 125.85 (2015 high) is viewed as an impulsive move, no change in this view. Price actions from 125.85 are seen as a corrective move which could still extend. In case of deeper fall, downside should be contained by 61.8% retracement of 75.56 to 125.85 at 94.77. Up trend from 75.56 is expected to resume at a later stage for above 135.20/147.68 resistance zone.
