USD/JPY Daily Outlook

Daily Pivots: (S1) 104.36; (P) 104.97; (R1) 105.35; More.

USD/JPY failed 105.70 high dropped sharply since then. Break of 104.02 minor support indicates that fall from 105.60 is still in progress and focus is now turning to 103.19 support. As long as this support holds, rise from 95.77 is still mildly in favor to extend further. However, break, with bearish divergence conditions in 4 hours MACD and RSI as background, will argue that the whole rise from 95.77 is over. Focus will then be shifted back to 100.02 support first.

In the bigger picture, sustained trading above 55 days EMA (now at 103.52) indicates 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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