USD/JPY edged higher to 109.77 last week but retreated since then. Initial bias remains neutral this week first. On the upside, above 109.77 will resume the rebound from 107.47 to retest 110.95 high. On the downside, break of 108.34 will turn bias back to the downside for 107.47 support and below.
In the bigger picture, medium term outlook is staying neutral with 111.71 resistance intact. We’d monitor the structure of the fall from 110.95, to assess whether it’s just correction to rise from 102.58 to 110.95, or a leg of a range pattern between 101.18 and 111.71, or starting another leg of the long term down trend.
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 pattern 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.