Daily Pivots: (S1) 110.32; (P) 110.93; (R1) 111.34; More…
USD/JPY’s break of 110.68 minor support suggests that fall from 111.82 has resumed. Intraday bias is back on the downside for deeper decline. For now, we’re holding on to the view that correction from 113.17 has completed at 109.76. We’d continue to expect strong support from 38.2% retracement of 104.62 to 113.17 at 109.90 to contain downside and bring rebound. On the upside, above 111.75/82 will target a test on 113.17 high. However, break of 109.76 will put focus on 109.36 key support level
In the bigger picture, corrective fall from 118.65 (2016 high) should have completed with three waves down to 104.62. Decisive break of 114.73 resistance will likely resume whole rally from 98.97 (2016 low) to 100% projection of 98.97 to 118.65 from 104.62 at 124.30, which is reasonably close to 125.85 (2015 high). This will stay as the preferred case as long as 109.36 support holds. However, decisive break of 109.36 will mix up the outlook again. And deeper fall should be seen back to 61.8% retracement of 104.62 to 113.17 at 107.88 and below.
