USD/JPY jumped to as high as 79.52 last week on intervention but turned sideway since then. Initial bias remains neutral this week and more consolidative trading could be seen. But we'd expect downside of retreat to be contained by 77.48 support and bring another rise. Break of 79.52 should send USD/JPY through 80.23 resistance to 61.8% retracement of 85.51 to 75.56 at 81.70.
In the bigger picture, while the rebound from 75.56 was strong, USD/JPY is still staying inside the falling channel that started back in 2007 at 124.13. There is still no clear indication of long term trend reversal even though medium term downside momentum is diminishing with bullish convergence condition in weekly MACD. We'd still favor further downside in medium term as long as 85.51 resistance holds and USD/JPY could spiral down further to 70 psychological level. Though, we'll pay attention to the eventual structure of the rise from 75.56 and adjust our view accordingly.
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.