USD/JPY Daily Outlook

Daily Pivots: (S1) 106.01; (P) 106.47; (R1) 107.16; More.

USD/JPY's corrective rise from 104.98 is still in progress and further upside could still be seen. Though, the corrective nature so far suggests that fall from 108.85 is still going to resume. Also, break of 108.59 is needed to turn short term outlook bullish again. Otherwise, risk remains on the downside. Note that prior break of trend line support, followed by breaking of 105.56/58 (50% retracement of 102.58 to 108.58 at 105.58 and 23.6% retracement of 95.77 to 108.58 at 105.56) indicates that medium term rebound from 95.77 has likely topped out at 108.58 already. Below 105.78 minor support will indicate rebound should have completed and flip intraday bias back to the downside. Further break of 104.98 will indicate fall from 108.58 has resumed for 104.43 support first.

In the bigger picture, USD/JPY has made a medium term bottom after down trend from 124.13 has just met 76.4% retracement of 79.75 to 147.68 at 95.78. Failure of 108.59 resistance is taken as the first signal that rebound from 95.77 has completed. Further break of 102.73 support will confirm this case.At this moment, it's premature to conclude whether rise from 95.77 represent whole correction pattern to fall from 124.13 or just part of it. But in either case, deeper fall should be seen to 61.8% retracement of 95.77 to 108.59 at 100.66. On the upside, while another recovery could be seen, short term risks will remain on the downside as long as long 108.59 key medium term resistance holds.

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