Daily Pivots: (S1) 106.50; (P) 106.85; (R1) 107.09; More…
At this point, USD/JPY is still staying in tight range below 107.48 temporary top. Intraday bias remains neutral first. On the downside, below 106.61 minor support will bring deeper fall to 105.65. Break of 105.65 support will indicate that the rebound is completed and target a test on 104.62 low. This will also retain medium term bearishness for down trend resumption later. On the upside, above 107.48 will extend the rebound to 38.2% retracement of 114.73 to 104.62 at 108.48 9 which is close to 108.12 and is crucial to determine the medium term outlook.
In the bigger picture, medium term down trend from 118.65 (2016 high) is still in progress and extending. Build up in downside momentum argues that it might be extending the whole corrective pattern from 125.85 (2015 high). 100% projection of 118.65 to 108.12 from 114.73 at 104.20 will be a key level to watch as firm break there could bring downside acceleration. And in that case, 98.97 key support level (2016 low) would at least be breached. This bearish case will now be favored as long as 108.12 support turned resistance holds.
