USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 95.09; (P) 95.56; (R1) 96.10; More.

At this point, intraday bias in USD/JPY remains on the upside as long as 95.61 minor support holds. Fall from 98.87 has possibly completed at 94.87 with bullish convergence condition in 4 hours MACD. Break of 97.18 resistance will confirm this case and bring retest of 98.87 next. On the downside,below 95.61 will dampen this view and turn outlook neutral first. Also, while another fall cannot be ruled out for the moment, focus will remain on reversal signal in case of another fall since we're holding on to the view that fall from 98.87 should be contained by 93.84/94.44 support

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 pave 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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