USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 99.13; (P) 99.43; (R1) 99.87; More.

USD/JPY's rebound from 95.77 resumes today and edges higher to 100.73. At this point, further upside could still be seen but upside is still expected to be limited by 101.23 resistance and bring another fall. Below 99.59 will turn intraday outlook neutral first. Further break of 97.62 support will suggest that rebound form 95.77 has completed and will bring retest of this low.

In the bigger picture, as discussed before, USD/JPY has just broken out of multi-year triangle consolidation pattern that started in 98 at 147.68. The decline from 124.13 has met 76.4% retracement of 79.75 to 147.68 at 95.78 so far. Some support is seen at this level. But still, there is no sign of reversal yet. Also, the structure, of the current fall from 124.13 argues that USD/JPY is just in the middle of a larger down trend only.

Medium term outlook remains bearish as long as 103.59 cluster resistance (61.8% retracement of 108.59 to 95.77 at 103.69) holds. Sustained trading below 95.78 will encourage further fall to next important psychological level at 90 first. However, firm break of 103.59 cluster resistance will argue that a medium term bottom is already in place. In such case, stronger medium term rebound should be seen to correct the whole fall from 124.13.

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