USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 109.52; (P) 109.82; (R1) 110.33; More…

Intraday bias in USD/JPY remains on the upside for the moment. Current rebound from 108.10 should target a test on 111.39 resistance first. Decisive break there will resume the whole rebound from 104.62. On the downside, break of 109.18 will extend the consolidation from 111.39 with another decline towards 108.10 support.

In the bigger picture, at this point, we’re slightly favoring the case that corrective decline from 118.65 (2016 high) has completed with three waves down to 104.62. Above 111.39 will affirm this view and target 114.73 for confirmation. However, it should be noted that USD/JPY is bounded in medium term falling channel from 118.65 (2016 high). Sustained break of 61.8% retracement of 104.62 to 111.39 at 107.20 will likely resume the fall from 118.65 through 104.62 low.