USD/JPY’s decline from 151.93 resumed last week and fell to as low as 127.45. Initial bias stays on the downside this week for 61.8% projection of 151.93 to 133.61 from 138.16 at 126.83. Break there will target 121.43 fibonacci level next. On the upside, above 129.3 minor resistance will turn intraday bias neutral first. But outlook will remain bearish as long as 134.76 resistance holds.
In the bigger picture, the firm break of 55 week EMA (now at 131.59) raises the chance of medium term bearish reversal, but that’s not confirmed yet. Strong support could be seen around 61.8% retracement of 102.58 to 151.93 at 121.43 and 38.2% retracement of 38.2% retracement of 75.56 to 151.93 at 122.75 to bring rebound. But break of 134.76 resistance is needed to indicate bottoming first. Otherwise further fall will remain in favor.
In the long term picture, 151.93 looks increasingly likely to be a long term major top. But it’s too early to call for long term bearish reversal at this point. Rebound from around 38.2% retracement of 75.56 to 151.93 at 122.75 will keep the case open for price action from 151.93 to be just a corrective pattern.
