Daily Pivots: (S1) 108.22; (P) 108.60; (R1) 108.86; More…
USD/JPY’s sharp fall suggests that rebound from 106.78 has completed at 108.99 after failing to sustain above 108.80 resistance. The corrective three wave structure and rejection by 55 day EMA indicates that near term bearishness remains. Intraday bias is turned back to the downside for 107.53 support first. Break will likely send USD/JPY through 106.78 to resume the decline from 112.40. For now, near term outlook will remain bearish as long as 108.99 resistance holds.
In the bigger picture, decline from 118.65 (Dec 2016) is still in progress, with the pair staying inside long term falling channel. Br eak 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.
