USD/JPY Daily Outlook

Daily Pivots: (S1) 103.89; (P) 104.36; (R1) 104.63; More.

USD/JPY draws some support from the 4 hours 55 EMA and recovers mildly. Nevertheless, with 4 hours MACD staying below signal line, an intraday top is likely in place at 104.85 and further downside is in favor, probably towards lower channel support (now at 101.98). Note that another rise to 104.96/108.59 resistance zone is still expected as long as this channel support holds. However, break will be the first signal that whole corrective rebound from 95.77 has completed and will put focus back to 100.02 support.

In the bigger picture, break of 103.59 cluster resistance, as well as 55 days EMA (now at 103.31) argues that a medium term bottom is in place after down trend from 124.13 has just met 76.4% retracement of 79.75 to 147.68 at 95.78. Focus is now on 108.59 resistance and break of which will break a series of lower highs, lower lows pattern that started at 124.13 and will confirm that this down trend has completed already. In such case, stronger medium term rebound should then be seen to retest 114.77 resistance first.

However, failure below 108.59, followed by break of 100.02 support will firstly indicate rebound from 95.77 has completed. Secondly, it will keep the lower higher, lower lows pattern intact and suggest that down trend from 124.13 is still in force.

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