Daily Pivots: (S1) 109.99; (P) 110.22; (R1) 110.59; More…
USD/JPY’s rebound from 109.54 extends higher today but stays below 110.89. Intraday bias remains neutral first. On the upside, break of 110.89 will extend the rise from 108.10 towards 111.39. But we’d be cautious on strong resistance from there to limit upside. Corrective pattern from 111.39 could extend with another falling leg. Break of 109.54 will target 108.10 and possibly below. But, we’d expect strong support from 61.8% retracement of 104.62 to 111.39 at 107.20 to contain downside and bring rebound.
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.
