USD/JPY Daily Outlook

Daily Pivots: (S1) 95.45; (P) 96.17; (R1) 96.64; More.

USD/JPY remains bounded in established range of 94.87/96.96 for the moment and outlook remains unchanged. Focus is still on 94.87 support. As long as this support holds, we'd still prefer the case that fall from 98.87, which is treated as the fifth leg in triangle consolidation has completed already. Above 96.96 will bring rally resumption to have a test of 98.87 resistance first. However, note that break of 94.87 will delay the bullish view and bring another low, probably into support zone of 93.84/94.44, before bottoming.

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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