Daily Pivots: (S1) 111.92; (P) 112.60; (R1) 112.95; More…
USD/JPY’s fall from 114.54 extends to as low as 111.96 so far today. There is no sign of bottoming yet and intraday bias remains on the downside. Current downside acceleration argues that USD/JPY is correcting whole up trend from 104.62, after rejection by 114.73 resistance. Further fall could be seen to 38.2% retracement of 104.62 to 114.54 at 110.75. We’ll look for bottoming signal above 109.76 key support. On the upside, break of 113.28 minor resistance is needed to indicate completion of the decline. Otherwise, near term outlook stays mildly bearish even in case of recovery.
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 109.76 support holds. However, decisive break of 109.76 will dampen this bullish view and turns outlook mixed again.
