Daily Pivots: (S1) 91.31; (P) 91.92; (R1) 92.53

USD/JPY's break of 91.42 minor support suggests that recovery from 90.12 has completed at 92.52 already. Intraday bias is flipped back to the downside for retesting 90.12 low first. Break will confirm whole fall form 97.77 has resumed for lower channel support at 89.56 next. On the upside, in case of another rise, we'd continue to expect recovery to be limited by 93.29 resistance and bring fall resumption . However, decisive break of 93.29 will indicate that whole fall from 97.77 has completed and will turn focus back to upper channel resistance (now at 96.46).

In the bigger picture, on the one hand, USD/JPY is still trading well below 55 weeks EMA and the long term falling trend line resistance The lower highs, lower lows pattern since 2007 high of 124.13 is still intact. Weekly MACD is also staying negative. On the other hand, the choppy look of the fall from 101.43 so far argues that it's corrective in nature and thus suggests that rise from 87.12 is still in progress. The conflicting indications keep medium term outlook mixed and question remains on whether USD/JPY has bottomed out at 87.12 already.

Focus is now on the lower channel support of the falling channel from 101.43. Sustained break there will indicate that the fall from 101.43 is accelerating which in turn argues that such fall is developing into an impulse. In other words, fall from 101.43 is part of the whole down trend from 124.12 and should extend beyond 87.12 low. On the other hand, while strong rebound from the channel support isn't an adequate signal of reversal, it will add more favor to the case that fall from 101.43 is merely a correction. Break of 97.77 resistance will further affirm the case that USD/JPY has bottomed out at 87.12 already.


Economic Indicators Update

22:45NZDCurrent Account Balance (NZD) Q20.12B-1.88B-1.25B-0.68B
6:15CHFTrade Balance (CHF) Aug1.79B2.03B2.35B2.21B
12:30CADRetail Sales M/M Jul 0.50%1.00% 
12:30CADRetail Sales Less Autos M/M Jul -0.10%1.00% 
14:00USDHouse Price Index M/M Jul 0.50%0.50% 
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