USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 92.37; (P) 92.99; (R1) 93.59; More.

USD/JPY's break of 92.37 minor support suggests that recovery from 91.79 has completed. Intraday bias is flipped back to the downside and break of 91.79 will confirm decline resumption for 161.8% projection of 98.87 to 94.87 from 96.96 at 90.48 next. On the upside, above 92.91 minor resistance will suggest that consolidation from 91.79 is still in progress with risk of another rise. Nevertheless, upside is still expected to be limited below 94,87 to complete the consolidation.

In the bigger picture, the strong break of 93.53/84 support revived the bearish case that USD/JPY has completed a head and shoulder top (ls: 99.67, h: 101.43, rs: 98.87). More importantly, note that USD/JPY is still staying below 55 weeks EMA (now at 98.96), 38.2% retracement of 124.13 to 87.12 at 101.25, and long term falling trend line resistance (now at 100.05) too. In other words, whole down trend from 124.13 is still in progress. Hence, we'd look forward to at least a test of 87.12 low, with much odds of breaking through to resume the down trend. On the upside, a break above 96.96 is now needed to invalidate this case.

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