USD/JPY rebounded to 105.67 last week but failed to break through 106.10 resistance. Subsequent break of 104.73 minor support suggest that it’s completed. Also, the pair is staying well inside falling channel, and below 55 day EMA, keeping near term outlook bearish. Intraday bias is now on the downside for retesting 103.17. On the upside, break of 105.67 will target 106.10 resistance.
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.
