Daily Pivots: (S1) 110.12; (P) 110.49; (R1) 110.70; More…

USD/JPY is drawing support from 4 hour 55 EMA but it’s bounded in range below 110.84 so far. Intraday bias remains neutral. Overall outlook is unchanged that price actions from 111.39 are developing into a corrective pattern. Below 109.18 will start the third leg to 108.10 and possibly below to complete the pattern. Above 110.84 will bring retest of 111.39 first. Break will resume the whole rebound from 104.62.

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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.

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