Daily Pivots: (S1) 109.39; (P) 109.74; (R1) 110.11; More…
USD/JPY rebounds strongly today but stays inside range of 109.36/110.39. Intraday bias remains neutral first. On the upside, break of 110.89 will resume the rise from 108.10 and target 111.39. Firm break there will resume the rally from 104.62 and target 114.73 key resistance. On the downside, below 109.36 will resume the fall from 110.89. In that case, as price actions from 111.39 are seen as a corrective pattern, we’d expect strong support from 61.8% retracement of 104.62 to 111.39 at 107.20 to contain downside and bring rebound.
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.
