USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 111.12; (P) 111.64; (R1) 112.53; More…

USD/JPY’s rally continues today and reaches as high as 112.62 so far. Intraday bias remains on the upside as current rally from 104.62 is targeting 61.8% projection of 104.62 to 111.39 from 109.36 at 113.54 first. Break will put focus on 114.73 key resistance for confirming medium term reversal. On the downside, below 111.91 minor support will turn intraday bias neutral first. But retreat should be contained above 111.13 resistance turned support to bring another rally.

In the bigger picture, at this point, we’re favoring the case that corrective decline from 118.65 (2016 high) has completed with three waves down to 104.62. Break of 111.39 resistance now affirms this view. Firm break of 114.73 will confirm and send USD/JPY through 118.65 towards 125.85 key resistance (2015 high). This will now be the preferred case as long as 109.36 support holds.