USD/JPY Daily Outlook

Daily Pivots: (S1) 108.90; (P) 109.52; (R1) 110.72; More.

As discussed before, correction from 110.66 might have completed at 108.13 already, after being supported slightly above 38.2% retracement of 103.76 to 110.66. Intraday outlook is cautiously bullish for retest of 110.66 high. Break will confirm that recent rally has resumed for next target of 61.8% projection of 95.77 to 108.58 from 103.76 at 111.68. On the downside, below 109.22 minor support will suggest that correction from 110.66 is still in progress for 107.28 support before completion. Though, downside of this correction is expected to be contained above 106.04 support and bring rally resumption.

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. Rebound from 95.77 is still in progress and should be targeting 61.8% projection of 95.77 to 108.58 from 103.76 at 111.68 first. Break will bring further rise to 61.8% retracement of 124.13 to 95.77 at 113.30.

However, considering bearish divergence condition in daily MACD, break of 106.04 support and sustained trading below the trend line support (99.57, 103.75, now at 106.21) will argue that whole medium term rebound from 95.77 has completed. Focus will then be turned back to 103.76 support and bring will confirm this case and turn outlook bearish again.

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