USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 110.32; (P) 110.93; (R1) 111.34; More…

USD/JPY’s strong rebound surges that corrective fall from 111.89 has completed with three waves down to 110.37. Intraday bias is back on the upside for 111.82 first. Break will resume the rebound from 109.76 and target 113.17. For now, we’re holding on to the view that correction from 113.17 has completed at 109.76. Hence, even in case of another decline, we’d continue to expect strong support from 38.2% retracement of 104.62 to 113.17 at 109.90 to contain downside and bring rebound.

In the bigger picture, corrective fall from 118.65 (2016 high) should have 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 stay as the preferred case as long as 109.36 support holds. However, decisive break of 109.36 will mix up the outlook again. And deeper fall should be seen back to 61.8% retracement of 104.62 to 113.17 at 107.88 and below.