Daily Pivots: (S1) 110.73; (P) 110.96; (R1) 111.13; More…
USD/JPY’s decline from 111.39 extends to as low as 109.55 today and took out 110.02 resistance turned support firmly. Near term channel support is also decisively taken out. Price actions from 111.39 should be corrective whole rally from 104.62. Deeper fall could be seen but we’d expect strong support from 108.82 cluster support (38.2% retracement of 104.62 to 111.39 at 108.80) to contain downside. On the upside, break of 111.39 is now needed to confirm rally resumption. Otherwise, more corrective trading would be seen in near term, with risk of another fall.
In the bigger picture, corrective decline from 118.65 (2016 high) has completed with three waves down to 104.62. Rise from 104.62 is possibly resuming the up trend from 98.97 (2016 low). This will be the preferred case as long as108.80 support holds. Decisive break of 114.73 resistance will confirm our view and target 118.65 and above.
