USD/JPY’s break of 109.28 resistance last week indicates resumption of whole rise from 104.45. Initial bias remains on the upside this week. Sustained trading above 109.31 structural resistance will add to the case of medium term reversal. Next near term target is 100% projection of 104.45 to 108.47 from 106.48 at 110.50. On the downside, below 108.64 minor support will turn intraday bias neutral first. But near term outlook will stay cautiously bullish as long as 107.88 support holds.
In the bigger picture, strong support was seen from 104.62 again. Yet, there is no confirmation of medium term reversal. Corrective decline from 118.65 (Dec. 2016) could still extend lower. But in that case, we’d expect strong support above 98.97 (2016 low) to contain downside to bring rebound. Meanwhile, on the upside, break of 112.40 key resistance will be a strong sign of start of medium term up trend.
In the long term picture, the rise from 75.56 (2011 low) long term bottom to 125.85 (2015 high) is viewed as an impulsive move, no change in this view. Price actions from 125.85 are seen as a corrective move which could still extend. In case of deeper fall, downside should be contained by 61.8% retracement of 75.56 to 125.85 at 94.77. Up trend from 75.56 is expected to resume at a later stage for above 135.20/147.68 resistance zone.
