USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 81.33; (P) 81.89; (R1) 82.18; More.

Near term outlook in USD/JPY remains bearish with 82.53 resistance intact. Current fall from 84.49 is expected to extend further to retest 80.29 low first, and possibly further to 79.75 key support level. On the upside, break of 82.53 resistance will indicate that a short term bottom is formed and bring lengthier consolidation before staging another decline.

In the bigger picture, with 85.92 cluster resistance (38.2% retracement of 94.97 to 80.29 at 85.89) intact, there is no confirmation of reversal yet and the longer term down trend in USD/JPY is possibly still in progress for another test on 79.75 (1995 low). Again, note that downside momentum is clearly diminishing with bullish convergence condition in weekly MACD. We'll continue to focus on reversal signal on next fall.

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