USD/JPY Daily Outlook

Daily Pivots: (S1) 79.57; (P) 79.70; (R1) 79.87; More...

USD/JPY's rally extends further to as high as 80.08 even though upside momentum is diminishing mildly with 4 hours MACD staying below signal line. Intraday bias remains on the upside and current rise from 76.02, which is part of the rally from 75.56, is expected to target 61.8% retracement of 85.51 to 75.56 at 81.70 next. On the downside, below 79.30 will argue that a short term top is formed and bring some consolidations first, before staging another rally.

In the bigger picture, the case of long term reversal is starting to build up as USD/JPY is trading above the long term falling channel that started at 2007 high of 124.13. As noted before, bullish convergence condition is present in weekly MACD for some time already. Sustained trading above 79.52 at least confirms that 75.56 is a medium term bottom. Further break of 85.51 will indicate reversal and target a test on 101.22 support turned resistance, which is close to 100 psychological level.

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