USD/JPY’s strong break of 104.00 support last week confirms resumption of whole decline from 111.17. Initial bias stays on the downside this week. Next near term target is 161.8% projection of 106.10 to 104.02 from 105.34 at 101.97. On the upside, above 104.02 support turned resistance will turn intraday bias neutral first. But overall near term outlook will remain bearish as long as 105.34 resistance holds.
In the bigger picture, USD/JPY is still staying in long term falling channel that started back in 118.65 (Dec. 2016). Hence, there is no clear indication of trend reversal yet. The down trend could still extend through 101.18 low. On the upside, break of 106.10 resistance is needed to be the first signal of medium term reversal. Otherwise, outlook will remain bearish.
In the long term picture, the rise from 75.56 (2011 low) long term bottom to 125.85 (2015 high) is viewed as an impulsive move, no change in this view. Price actions from 125.85 are seen as a corrective move which could still extend. In case of deeper fall, downside should be contained by 61.8% retracement of 75.56 to 125.85 at 94.77. Up trend from 75.56 is expected to resume at a later stage for above 135.20/147.68 resistance zone.
