USD/JPY Daily Outlook

Daily Pivots: (S1) 94.74; (P) 95.35; (R1) 95.83; More.

While another fall is still mildly in favor with 95.88 minor resistance intact, we're holding on to the view that fall from 98.87 should be contained by 93.84/94.44 support. Hence, focus will remain on reversal signal in case of another fall. Meanwhile, considering mild bullish convergence conditions in 4 hours MACD, above 95.88 will flip intraday bias back to the upside. Further break of 97.18 will indicate that fall from 98.87 has completed and bring rally to retest this 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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