USD/JPY Daily Outlook

Daily Pivots: (S1) 95.61; (P) 95.96; (R1) 96.19; More.

USD/JPY's break of 95.51 indicates that fall from 98.87 has resumed and at this point, intraday bias remains on the downside as long as 95.71 minor resistance holds. Further decline might still be seen. However, note that since we're treating fall from 98.87 as the final leg of triangle consolidation that started at 99.67, we'd expect downside of the current fall to be contained by 93.84/94.44 support zone and bring strong rebound. Above 95.71 will turn intraday outlook neutral first. Further break of 97.18 will indicate that such fall has completed and bring rally to test 98.87 resistance.

In the bigger picture, price actions from 99.67 are treated as consolidation in the larger up trend from 87.12 only, in form of triangle pattern. Fall from 98.87 is viewed as the final leg of such consolidation and should be contained above 93.84 support to conclude the consolidation. Break of 98.87 will be an important signal that whole rally from 87.12 is resuming and break of 101.43 will path the way to next key level at 110.65.

However, note that a break below 93.58/84 support zone will invalidate the bullish case. Instead, it will revive the bearish case that USD/JPY has completed a head and shoulder top (ls: 99.67, h: 101.43, rs: 98.87) and will in turn indicate that whole down trend from 124.43 is still in progress.

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