Daily Pivots: (S1) 108.65; (P) 109.46; (R1) 109.94; More…
USD/JPY’s sharp decline and break of 109.22 minor support indicates that rebound from 108.27 has completed at 110.47. More importantly, larger fall from 114.73 is still in progress. Intraday bias is flipped back to the downside for 108.27 first. Break will now likely resume the medium term correction from 118.65. That will send USD/JPY through 107.31 to 106.48 fibonacci level.
In the bigger picture, current development argues that the corrective pattern from 118.65 is extending. There is risk of dropping further to 61.8% retracement of 98.97 to 118.65 at 106.48. But this level should provide strong support to contain downside and bring resumption of rise from 98.97. However, sustained break of 106.48 will now likely send USD/JPY through 98.97 to resume the corrective fall from 125.85 (2015 high).
