Daily Pivots: (S1) 106.01; (P) 106.23; (R1) 106.63; More…
USD/JPY’s break of 106.73 resistance now suggests short term bottoming at 104.45, on bullish convergence condition in 4 hour MACD. Intraday bias is now back on the upside for 55 day EMA (now at 107.17). Note that USD/JPY has just drew support from 104.62 key support. Sustained break of 55 day EMA will indicate short term reversal and pave the way to 109.31 resistance next. On the downside, break of 105.73 minor support will turn bias back to the downside for retesting 104.45 low instead.
In the bigger picture, decline from 118.65 (Dec 2016) is still in progress and the pair is staying well inside long term falling channel. Firm break of 104.69 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 109.31 resistance is needed to the first sign of medium term bottoming. Otherwise, further decline will remain in favor in case of rebound.
