Daily Pivots: (S1) 111.23; (P) 111.55; (R1) 111.92; More…
A temporary top is in place at 111.87 in USD/JPY. Intraday bias is turned neutral for some consolidations first. Downside should be contained above 109.54 support to bring another rally. Above 111.87 will target medium term channel resistance (now at 112.91). Sustained break there will argue that whole correction from 118.65 has completed too. In that case, further rise should be seen to 114.49 resistance for confirmation.
In the bigger picture, rise from 98.97 (2016 low) is seen as the second leg of the corrective pattern from 125.85 (2015 high). It’s unclear whether this this second leg has completed at 118.65 or not. But medium term outlook will be mildly bearish as long as 114.49 resistance holds. And, there is prospect of breaking 98.97 ahead. Meanwhile, break of 114.49 will bring retest of 125.85 high. But even in that case, we don’t expect a break there on first attempt.
