USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 112.15; (P) 112.35; (R1) 112.49; More…

USD/JPY recovers notably today but stays below 112.79 temporary top. Intraday bias remains neutral first and more consolidation could be seen. Below 112.21 will target 4 hour 55 EMA (now at 111.68). But downside should be contained well above 111.13 resistance turned support to bring rally resumption. On the upside, break of 112.79 will target 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 our bullish medium term view.

In the bigger picture, current development, with the solid break of medium term channel resistance from 118.65 (2016 high), affirm our view that corrective fall from there has completed with three waves down to 104.62. Decisive break of 114.73 resistance will likely resume whole rally from 98.97 (2016 low) to 100% projection of 98.97 to 118.65 from 104.62 at 124.30, which is reasonably close to 125.85 (2015 high). This will now be the preferred case as long as 119.36 support holds.