Daily Pivots: (S1) 107.92; (P) 108.09; (R1) 108.26; More…
With today’s retreat, a temporary top is formed at 108.26. Intraday bias in USD/JPY is turned neutral first. Further rise will remain in favor as long as 107.19 minor support holds. Above 108.26 will target 109.31 key resistance. We’d continue to look for topping sign as it approaches this 109.31. On the downside, break of 107.19 minor support will suggest that rebound from 104.45 has completed. Intraday bias will be turned back to the downside for retesting 104.45 low. However, decisive break of 109.31 will carry larger bullish implication.
In the bigger picture, decline from 118.65 (Dec 2016) is still in progress and the pair is staying well inside long term falling channel. Firm break of 104.69 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. However, firm break of 109.31 will be the first sign of medium term reversal and bring stronger rise to 112.40 resistance for confirmation.
