USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 109.63; (P) 109.78; (R1) 109.99; More…

USD/JPY’s correction from 110.95 short term top accelerates lower today. Deeper fall would be seen to 108.40 support and possibly below. But downside should be contained by 38.2% retracement of 102.58 to 110.95 at 107.75 to bring rebound. On the upside, above 109.93 minor resistance will turn intraday bias back to the upside for retesting 110.95 high first.

In the bigger picture, current development suggests that the corrective down trend from 118.65 (Dec 2016) has completed at 101.18. Firm break of 112.22 resistance should confirms this bullish case. A medium term up trend could then has started for 100% projection of 101.18 to 111.71 from 102.58 at 113.11 and then 161.8% projection at 119.61. However, rejection by 111.71, followed by sustained trading below 55 day EMA (now at 107.61), will dampen the bullish view and keep medium term outlook neutral first.