USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 86.85; (P) 87.70; (R1) 88.45; More.

As noted before, temporary low is in place in USD/JPY at 86.96 and consolidations from there might extend further. Nevertheless, recovery should be limited well below 90.27 resistance and bring fall resumption. Below 86.96 will target retest of 84.81 low.

In the bigger picture, the break of 88.13 support confirms that medium term rebound from 84.81 has completed with three waves up to 94.97 already. The corrective structure in turn indicates that whole down trend from 2007 high of 124.13 is still in progress. Retest of 84.81 should be seen next and break will confirm down trend resumption for next key level of 79.75 (1995 low). On the upside, break of 94.97 resistance is needed to be the first sign of medium term reversal. Otherwise, we'll stay bearish.