USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 107.55; (P) 108.07; (R1) 108.38; More.

USD/JPY's fall from 108.59 extends further today reaching as low as 107.25 so far. At this point, intraday outlook is neutral. As discussed before, USD/JPY's corrective rise from 104.96 could have completed at 108.59, slightly below mentioned 108.61/71 cluster resistance (38.2% retracement of 114.77 to 104.96 at 108.71 & 100% projection of 104.96 to 107.89 from 105.68 at 108.61). Further break of 106.34 support will;; confirm this case and bring retest of 104.96 low. However, on the upside, break of 108.61/71 cluster resistance will indicate that whole rise from 104.96 is still in progress towards 110.10 resistance.

In the bigger picture, fall from 114.77 should still be in progress as long as 110.10 resistance holds. Though, below 104.96 is needed to confirm it has resumed. Otherwise, some more consolidation could still be seen in short term. Also, whole medium term down trend from 124.13 remains in force towards key medium term support zone of 101.22/65 level. However, since the structure of the fall from 124.13 is not clearly impulsive yet, the fall from 124.13 might only be part of a wide range consolidation pattern only and 101.22/65 key support might hold. Much attention will be paid there on sign of reversal as USD/JPY approaches this key support zone.

On the upside, though, above 110.10 will indicate that fall from 114.77 has already completed. Stronger rally could the be seen retest the trend line resistance (now at 112.43). But still, a decisive break of trend line resistance is needed to be the first signal that whole down trend fro 124.13 has completed. Otherwise, medium term outlook will remain bearish.

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