USD/JPY dropped to as low as 104.99 last week as fall from 112.22 accelerated. Initial bias remains on the downside this week for 104.45 low. Decisive break there will resume larger fall from 118.65. On the upside, break of 106.84 minor resistance is needed to indicate short term bottoming. Otherwise, outlook will remain bearish in case of recovery.
In the bigger picture, fall from 118.65 (Dec 2016) is still in progress. It’s seen as part of a larger consolidative pattern from 125.85 (2015 high). Such decline could could extend through 98.97 (2016 low). For now, risk will remain on the downside as long as 112.22 resistance holds, even in case of rebound.
In the long term picture, the rise from 75.56 (2011 low) long term bottom to 125.85 (2015 high) is viewed as an impulsive move, no change in this view. Price actions from 125.85 are seen as a corrective move which could still extend. In case of deeper fall, downside should be contained by 61.8% retracement of 75.56 to 125.85 at 94.77. Up trend from 75.56 is expected to resume at a later stage for above 135.20/147.68 resistance zone.