USD/JPY’s fall from 114.73 extended to as low as 111.06 last week and recovered after forming a temporary low. Initial bias is neutral this week first. But deeper fall will be expected as long as 112.71 holds. Below 111.06 will target 61.8% retracement of 107.31 to 114.73 at 110.14. For the moment, we’re still favoring the case medium term corrective pattern from 118.65 has completed at 107.31 already. Hence, we’ll looking for bottoming below 110.14 to bring another rise.
In the bigger picture, medium term rise from 98.97 (2016 low) is not completed yet. It should resume after corrective fall from 118.65 completes. Break of 114.49 resistance will likely resume the rise to 61.8% projection of 98.97 to 118.65 from 107.31 at 119.47 first. Firm break there will pave the way to 100% projection at 126.99. This will be the key level to decide whether long term up trend is resuming. However, firm break of 111.64 support will dampen this view and turn focus back to 107.31 instead.
In the long term picture, the rise from 75.56 (2011 low) long term bottom to 125.85 top 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.
