USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 113.37; (P) 113.77; (R1) 114.13; More…

A temporary top is in place at 114.16 with 4 hour MACD crossed below signal line. Intraday bias in USD/JPY is turned neutral first. We’re still favoring the case that correction from 118.65 has completed at 111.58. Above 114.16 will target 115.37 resistance first. Break will confirm this bullish case and bring retest of 118.65 high. Meanwhile, below 112.85 minor support will dampen this bullish view and could extend the correction from 118.65. In that case, downside should be contained by 38.2% retracement of 98.97 to 118.65 at 111.13 and bring rebound.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. The impulsive structure of the rise from 98.97 suggests that the correction is completed and larger up trend is resuming. Decisive break of 125.85 will confirm and target 61.8% projection of 75.56 to 125.85 from 98.97 at 130.04 and then 135.20 long term resistance. Rejection from 125.85 and below will extend the consolidation with another falling leg before up trend resumption.

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