USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 104.1979; (P) 106.03; (R1) 107.31; More.

USD/JPY retreats mildly after rebounding to as high as 107.09 but intraday bias should still remain on the upside as long as 105.43 minor support holds. As discussed before, prior break of 106.80 resistance indicates that fall from 107.75 has already completed. Also, it argues that whole decline from 108.58 has completed at 103.76 already, leaving a corrective three wave structure. Further rally could now be seen to 107.75 resistance first and break will bring retest of 108.58/59 resistance zone. On the downside, below 105.43 will turn intraday outlook neutral first. But break of 103.76 is now needed to turn short term outlook bearish again. Otherwise, another rise is still in favor even after pull back.

In the bigger picture, USD/JPY has made a medium term bottom after down trend from 124.13 has just met 76.4% retracement of 79.75 to 147.68 at 95.78. Failure of 108.59 resistance was taken as the first signal that rebound from 95.77 has completed. But the corrective structure of the fall from 108.58 to 103.76 dampens this view. Outlook is mixed for the moment. On the upside, firm break of 108.59 will confirm hat whole medium term rise from 95.77 has resumed for 114.77 resistance. Meanwhile, on the downside, break of 102.73 support will confirm that medium term rebound from 95.77 has completed and bring deeper fall towards 61.8% retracement of 95.77 to 108.58 at 100.66.

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