Dollar index rises further to 78.16 in early US session and bias remains on the upside for 78.45 resistance. As noted before, pull back from 78.45 should have completed at 77.33 and rise from 74.19 is resuming. Break of 78..45 resistance will confirm this case and will target 38.2% retracement of 89.62 to 74.19 at 80.08.

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 91.65; (P) 91.86; (R1) 92.20; More.

USD/JPY's rally continues in early US session and breaks 92.31 resistance. As noted before, short term outlook remains bullish as long as 91.12 support holds. Current rally from 84.81 is expected to continue towards 100% projection of 84.81 to 90.75 from 87.36 at 93.30 next. On the downside, though, notice bearish divergence condition in 4 hours MACD, break of 91.12 support will indicate that rise fro 84.81 has possibly completed and will turn outlook bearish for 87.36 support in this case.

In the bigger picture, as noted before, there is no clear indication of medium term reversal yet as USD/JPY is still trading well below 55 weeks EMA (now at 94.54) as well as the trend line resistance at 94.44. Whole down trend from 124.13 could still be in progress and might extend towards 1995 low of 79.75 after completing the rebound from 84.81. However, note that sustained trading above the medium trend line resistance will be the first signal of medium term reversal and in such case, focus will turn to 101.43 resistance for confirmation.