USD/JPY edged higher to 113.17 last week but subsequent sharp fall indicates short term topping. Breach of 111.39 resistance turn support argues that it’s now corrective whole rise fro 104.62. Initial bias remains on the downside this week for 55 day EMA (now at 110.39). We’d expect strong support from 38.2% retracement of 104.62 to 113.17 at 109..90 to contain downside and bring rebound. On the upside, above 112.04 minor resistance will turn intraday bias neutral first. But break of 113.17 is needed to confirm up trend resumption. Otherwise, more condition would be seen with risk of another fall.
In the bigger picture, corrective fall from 118.65 (2016 high) should have completed with three waves down to 104.62. Decisive break of 114.73 resistance will likely resume whole rally from 98.97 (2016 low) to 100% projection of 98.97 to 118.65 from 104.62 at 124.30, which is reasonably close to 125.85 (2015 high). This will now be the preferred case as long as 109.36 support holds.
In the long term picture, the rise from 75.56 (2011 low) long term bottom to 125.85 top is viewed as an impulsive move, no change in this view. Price actions from 125.85 are seen as a corrective move 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.