Daily Pivots: (S1) 108.69; (P) 109.21; (R1) 109.49; More..
USD/JPY retreated sharply after forming a temporary top at 109.72. Intraday bias is turned neutral for some consolidations first. Outlook will remain cautiously bullish as long as 108.27 support holds. On the upside, break of 109.72 will resume whole rally from 104.45 to 100% projection of 104.45 to 108.47 from 106.48 at 110.50. Break will target long term channel resistance at 111.78 next. However, firm break of 108.27 will indicate near term reversal and turn outlook bearish for 106.48 support first.
In the bigger picture, strong support was seen from 104.62 again. Yet, there is no confirmation of medium term reversal. Corrective decline from 118.65 (Dec. 2016) could still extend lower. But in that case, we’d expect strong support above 98.97 (2016 low) to contain downside to bring rebound. Meanwhile, on the upside, break of 112.40 key resistance will be a strong sign of start of medium term up trend.
