Daily Pivots: (S1) 109.13; (P) 109.52; (R1) 109.80; More…
USD/JPY drops to as low as 108.41 so far today and there is no sign of bottoming yet. Sustained trading below 108.82 cluster support (38.2% retracement of 104.62 to 111.39 at 108.80) will dampen our bullish view. And USD/JPY is probably not reversing the larger decline from 118.65 yet. In that case, deeper fall will be seen to 61.8% retracement at 107.20 and possibly below. Nonetheless, strong rebound from the current level, followed by break of 109.82 will revive near term bullishness and bring retest of 111.39 first.
In the bigger picture, for now, we’re holding on to the view that corrective decline from 118.65 (2016 high) has completed with three waves down to 104.62. Rise from 104.62 is possibly resuming the up trend from 98.97 (2016 low). Decisive break of 114.73 resistance will confirm our view and target 118.65 and above. However, sustained break of 108.82 will dampen the bullish outlook and revive the case of a break of 104.62 low before medium term bottoming.
