Daily Pivots: (S1) 106.63; (P) 107.97; (R1) 108.69; More…
USD/JPY’s sharp decline suggests that rebound from 106.78 has completed at 109.31 already. The three wave corrective structure of the rebound argues that fall from 112.40 is still in progress. Intraday bias is back on the downside. Decisive break of 106.78 will target 104.69 low next. On the upside, above 107.56 minor resistance will turn intraday bias neutral and bring consolidations. But risk will stay on the downside as long as 109.31 resistance holds.
In the bigger picture, decline from 118.65 (Dec 2016) not completed yet, with the pair staying inside long term falling channel. Break of 104.62 will target 100% projection of 118.65 to 104.62 from 114.54 at 100.51. For now, we’d expect strong support above 98.97 (2016 low) to contain downside to bring rebound. In any case, break of 112.40 is needed to the first serious sign of medium term bullishness. Otherwise, further decline will remain in favor in case of rebound.
