Daily Pivots: (S1) 112.80; (P) 113.03; (R1) 113.41; More..
USD/JPY recovered to 113.24 but was rejected by 4 hour 55 EMA and drops sharply. As it’s staying above 112.57 temporary low, intraday bias stays neutral. On the downside, break of 112.57 will target 112.30 first. Break there will extend the fall from 114.20 to 111.37 support and below. On the upside, above 113.24 will turn bias to the upside for 114.03 first. Overall, price actions from 114.54 are seen as a consolidation pattern. Hence, even in case of deep decline, downside should be contained by 38.2% retracement of 104.62 to 114.54 at 110.75 to bring rebound. Larger rise from 104.62 is expected to resume later.
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 stay as the preferred case as long as 109.76 support holds. However, decisive break of 109.76 will dampen this bullish view and turns outlook mixed again.
