USD/JPY surged to as high as 104.93 last week, breaking both falling channel resistance and 55 day EMA decisively. The development argues that down trend from 111.71 has completed at 102.58, on bullish convergence condition in daily MACD. Initial bias remains on the upside this week for 38.2% retracement of 111.71 to 102.58 at 106.06. On the downside, break of 104.16 minor support will turn intraday bias neutral first.
In the bigger picture, USD/JPY is still staying in long term falling channel that started back in 118.65 (Dec. 2016), and there is no clear indication of trend reversal yet. Though, sustained trading above 55 week EMA (now at 105.97) will be the first sign of reversal and turn focus to channel resistance (now at 1110.31).
In the long term picture, the rise from 75.56 (2011 low) long term bottom to 125.85 (2015 high) is viewed as an impulsive move, no change in this view. Price actions from 125.85 are seen as a corrective pattern which could still extend. In case of deeper fall, downside should be contained by 61.8% retracement of 75.56 to 125.85 at 94.77. Up trend from 75.56 is expected to resume at a later stage for above 135.20/147.68 resistance zone.
