Despite edging lower to 76.55 initially, the spike recovery last week dampens the immediate bearish view and we'll stay neutral first. On the downside, below 76.55 will revive the case that consolidation from 75.94 has finished at 77.85 already. In such case, bias will be turned back to downside for 75.94 first. Break will confirm resumption of whole fall from 85.51. On the upside, above 77.85 will bring stronger rebound. But after all, we'll continue to stay bearish in USD/JPY as long as 80.23 resistance holds and expect more downside ahead.
In the bigger picture, USD/JPY is still staying well inside the falling channel that started back in 2007 at 124.13. There is no indication of trend reversal yet even though medium term downside momentum is diminishing with bullish convergence condition in weekly MACD. Such down trend is still in favor to continue to 70 psychological level. In any case, break of 80.23 resistance is first needed to indicate completion of fall from 85.51. Secondly, break of 85.51 is needed to be the first signal of medium term reversal. Otherwise, we'll stay cautiously bearish in the pair.
In the long term picture, current decline suggests that the long term down trend in USD/JPY is still in progress. Such down trend is expected to extend further into uncharted territory with 70 psychological level as next target. In any case, we'd at least need to see sustained break of 85.51 before considering trend reversal.