Daily Pivots: (S1) 108.29; (P) 108.46; (R1) 108.66; More..
USD/JPY’s rebound from 107.65 extends higher in early US session and focus is back on 108.86 resistance. Break should indicate that correction from 109.72 has completed at 107.65, after hitting 38.2% retracement of 104.45 to 109.72 at 107.70. Further rise should then be seen to retest 109.72 high. In case of another fall, we’d still expect strong support form 107.70 to contain downside.
In the bigger picture, USD/JPY is staying in long term falling channel that started at 118.65 (Dec. 2016). Recovery from 104.45 also failed to sustain above 55 week EMA (now at 109.02). Overall outlook remains bearish and fall from 118.65 is in favor to extend through 104.45 low. This will now stay as the favored case as long as 109.72 resistance holds.
