Daily Pivots: (S1) 110.14; (P) 110.56; (R1) 110.88; More…
USD/JPY dipped to 110.18 but quickly recovered ahead of 61.8% retracement of 107.31 to 114.73 at 110.14. Intraday bias stays neutral first. At this point, further decline cannot be ruled out. But we’d look for bottoming again below 110.14 fibonacci level. Meanwhile, on the upside, break of 111.26 support turned resistance will suggest that USD/JPY has bottomed slightly earlier than expected. In that case, intraday bias will be turned back to the upside for 113.38 resistance. Decisive break there will confirm completion of the corrective pull back from 114.73 and turn outlook bullish.
In the bigger picture, we’re holding on to the view that correction from 118.65 is completed at 107.31. And medium term rise from 98.97 (2016 low) is going to resume soon. Sustained break of 114.73 should affirm our view and send USD/JPY through 118.65. However, break of 107.31 will dampen this view and extend the medium term fall back to 98.97 low.
