Daily Pivots: (S1) 110.49; (P) 110.70; (R1) 111.05; More…
USD/JPY drew strong support from 4 hour 55 EMA and rebounds sharply. Focus is turned back to 111.13 minor resistance. Break there will target 111.39 first. Based on current momentum, firm break of 111.39 will resume the larger rally from 104.62 to 114.73 key resistance next. On the downside, below 110.27 will turn bias to the downside for 109.36 first.
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.
