USD/JPY edged higher to 83.96 last week but lacked follow through buying and retreated. Initial bias is neutral this week and more consolidations would likely be seen first. Nevertheless, downside of the current retreat should be contained above 61.8% retracement of 81.12 to 83.96 at 82.20 and bring rise resumption. We'd maintain our view that while rise from 80.93 is resuming for 84.49 resistance. However, break of 82.20 fibonacci level will dampen this view and turn focus back to 80.93/81.12 support zone.

In the bigger picture, with 85.92 cluster resistance (38.2% retracement of 94.97 to 80.29 at 85.89) intact, there is no confirmation of reversal yet and the longer term down trend in USD/JPY is possibly still in progress for another test on 79.75 (1995 low). Decisive break of 79.75 will target 61.8% projection of 94.97 to 80.29 from 84.49 at 75.41 next. On the upside, break of 84.49 resistance, though, will argue that a medium term bottom is likely formed and will turn focus back to 85.92 cluster resistance for confirmation.

In the long term picture, there is no indication of trend reversal yet and USD/JPY's long term down trend could still extend further to 1995 low of 79.75. We'd anticipate some strong support from 79.75 initially to bring rebound. Focus will be on whether 79.75 would hold or USD/JPY is indeed resuming the multi decade decline that started back in the 80's.

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