Daily Pivots: (S1) 109.61; (P) 109.82; (R1) 110.05; More…
USD/JPY’s sharp decline and break of 109.50 minor support indicates short term topping at 110.02, on bearish divergence condition in 4 hour MACD. Intraday bias is turned to the downside for deeper retreat to near term channel support (now at 108.48). But we’d expect strong support from 38.2% retracement of 104.62 to 110.02 at 107.95 to contain downside and bring rebound. Break of 110.02 will resume the rise from 104.62 to t 61.8% retracement of 114.73 to 104.62 at 110.86 next.
In the bigger picture, break of 108.12 support turned resistance now suggests that corrective fall from 118.65 (2016 high) has completed with three waves down to 104.62. And, rise from 98.97 (2016 low) could be resuming. Focus is back on 114.73 resistance and break there will pave the way to 118.65 and above. This will now be the preferred case as long as USD/JPY stays above 55 day EMA (now at 107.97).
