Daily Pivots: (S1) 106.55; (P) 106.90; (R1) 107.21; More..
A temporary low is formed at 106.57 with today’s recovery. Intraday bias is turned neutral for some consolidations. Another fall is expected as long as 108.24 minor resistance holds. Break of 106.57 will target 105.98 support and below. At this point, the pattern from 111.71 is seen as a correction. We’d expect strong support from 61.8% retracement of 101.18 to 111.71 at 105.20 to contain downside to bring rebound. On the upside, break of 108.24 will turn bias back to the upside for 109.85 resistance instead.
In the bigger picture, USD/JPY is still staying in long term falling channel that started back in 118.65 (Dec2016). Hence, there is no clear indication of trend reversal yet. Break of 105.98 support could extend the down trend through 101.18 low. However, sustained break of 112.22 should confirm completion of the down trend and turn outlook bullish for 118.65 and above.
