Daily Pivots: (S1) 104.99; (P) 105.53; (R1) 105.82; More…
Intraday bias in USD/JPY remains on the downside despite today’s recovery. Prior break of 105.24 support confirms resumption of decline from 114.73. Such fall is part of the whole pattern from 118.65. Intraday bias now stays on the downside for 100% projection of 118.65 to 108.12 from 114.73 at 104.20 next. Sustained break there will pave the way to 98.97 (2016 low). On the upside, break of 106.63 resistance is needed to indicate short term bottoming. Otherwise, outlook will remain bearish in case of recovery.
In the bigger picture, medium term down trend from 118.65 2016 high is still in progress and extending. Build up in downside momentum argues that it might be extending the whole corrective pattern from 125.85 (2015 high). 100% projection of 118.65 to 108.12 from 114.73 at 104.20 will be a key level to watch as firm break there could bring downside acceleration. And in that case, 98.97 key support level (2016 low) would at least be breached. This bearish case will now be favored as long as 108.12 support turned resistance holds.
