Daily Pivots: (S1) 108.66; (P) 108.81; (R1) 109.01; More…
USD/JPY drops sharply in early US session but stays above 108.28 minor support. Intraday bias is turned neutral first. On the downside, break of 108.28 will indicate completion of rebound from 106.78. Intraday bias will be turned to the downside for 107.53 support and then retesting 106.78 low. On the upside, break of 108.99 and sustained trading above 108.80 will confirm short term bottoming at 106.78. Further rise should then been seen to 110.67 resistance next.
In the bigger picture, decline from 118.65 (Dec 2016) is still in progress, with the pair staying inside long term falling channel. Break of 104.62 will target 100% projection of 118.65 to 104.62 from 114.54 at 100.51. For now, we’d expect strong support above 98.97 (2016 low) to contain downside to bring rebound. In any case, break of 112.40 is needed to the first serious sign of medium term bullishness. Otherwise, further decline will remain in favor in case of rebound.
