Daily Pivots: (S1) 110.39; (P) 110.67; (R1) 110.96; More…
USD/JPY continues to lose upside momentum as seen in 4 hour MACD. But there is no sign of topping yet. Intraday bias stays cautiously on the upside for 111.39 high. Break there will also resume the rise from 104.62 and target 114.73 key resistance. On the downside, though, below 110.55 minor will argue that a temporary top is at least formed. More importantly, the corrective pattern from 111.39 could then extend with another down leg. Hence, in that case, intraday bias will be turned to the downside for 109.36 support and below.
In the bigger picture, at this point, we’re slightly favoring the case that corrective decline from 118.65 (2016 high) has completed with three waves down to 104.62. Above 111.39 will affirm this view and target 114.73 for confirmation. However, it should be noted that USD/JPY is bounded in medium term falling channel from 118.65 (2016 high). Sustained break of 61.8% retracement of 104.62 to 111.39 at 107.20 will likely resume the fall from 118.65 through 104.62 low.
