USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 108.69; (P) 109.07; (R1) 109.54; More…

USD/JPY’s recovery continues today but is staying well below 110.18 resistance. Intraday bias remains neutral and outlook stays bearish. That is, deeper decline is still expected. On the downside, break of 108.27 will extend recent fall through 107.31 support to next fibonacci support at 106.48. Nonetheless, break of 110.18 will be the first sign of near term reversal and will turn bias back to the upside for 111.47 resistance.

In the bigger picture, current development argues that the corrective pattern from 118.65 is extending. There is risk of dropping further to 61.8% retracement of 98.97 to 118.65 at 106.48. But this level should provide strong support to contain downside and bring resumption of rise from 98.97. However, sustained break of 106.48 will now likely send USD/JPY through 98.97 to resume the corrective fall from 125.85 (2015 high).

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