Daily Pivots: (S1) 113.16; (P) 113.37; (R1) 113.67; More…

A temporary top is in place at 113.68 in USD/JPY and intraday bias is turned neutral for consolidation. Further rally is expected as long as 111.98 support holds. Above 113.68 will target 114.73 resistance first. Decisive break there will resume whole rise form 107.31. More importantly, that will confirm completion of medium term correction from 118.65 at 107.31. In that case, retest of 118.65 should be seen next. However, break of 111.98 support will extend the correction from 114.73 with another fall, possibly to 61.8% retracement of 107.31 to 114.73 at 110.14 before completion.

In the bigger picture, we’re holding on to the view that correction from 118.65 is completed a 107.31. And medium term rise from 98.97 (2016 low) is resuming. Sustained break of 114.73 should affirm our view and send USD/JPY through 118.65. However, break of 107.31 will dampen this will and extend the medium term fall back to 98.97 low.

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