USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 108.61; (P) 108.79; (R1) 108.97; More…

USD/JPY’s fall from 110.95 accelerates to as low as 108.00 so far. Intraday bias remains on the downside for the moment. At this point, we’d still expect strong support from 38.2% retracement of 102.58 to 110.95 at 107.75 to bring rebound. On the upside, above 108.99 support turned resistance will turn bias back to the upside for retesting 110.95 high. However, sustained break of 107.75 will bring deeper fall to 61.8% retracement at 105.77.

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 107.92) will dampen the bullish view and keep medium term outlook neutral first.