USD/JPY edged lower to 106.07 last week but quickly recovered. Initial bias remains neutral this week first. As long as 107.64 resistance holds, another fall could be seen to 105.98 support and below. But downside should be contained by 61.8% retracement of 101.18 to 111.71 at 105.20 to bring rebound. Meanwhile, firm break of 107.64 should suggest completion of the fall from 109.85. Intraday bias will be turned back to the upside for this resistance.
In the bigger picture, USD/JPY is still staying in long term falling channel that started back in 118.65 (Dec2016). Hence, there is no clear indication of trend reversal yet. The down trend could still extend through 101.18 low. However, sustained break of 112.22 should confirm completion of the down trend and turn outlook bullish for 118.65 and above.
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.
