Despite edging lower to 88.13 initially, USD/JPY staged a strong rebound from there and closed at 90.27 last week. A short term bottom is in place and initial bias remains on the upside and stronger rally could be seen towards near term falling trend line (now at 91.62). On the downside, below 89.32 minor support will indicate that rebound from 88.13 has completed and will flip intraday bias back to the downside for retesting this support.
In the bigger picture, with 87.36 support intact, there is no confirmation that rise from 84.81 is finished. Also, stronger than expected rebound from 88.13 mixed out the outlook in USD/JPY. We'd stay neutral for the moment. On the upside, break of 92.14 resistance will confirm that whole decline from 93.74 has completed with three waves down to 88.13 already. The corrective structure will in turn indicate that rise from 84.81 is still in progress for another high above 93.74. On the downside, break of 88.13 will reaffirm the bearish case that rise from 84.81 is completed at 93.74 already and will turn focus to 87.36 support for confirmation.
In the long term picture, downside momentum is clearly diminishing with monthly MACD back above signal line. However, there is no confirmation of long term reversal yet. Down trend from 124.13 might still continue as long as 101.43 resistance holds and might extend further towards 79.75. Nevertheless, break of 101.43 resistance will break the lower high lower low pattern and will suggest that a long term bottom is in place. The trend should then reversed to continue the sideway pattern that started at 79.75 in 1995.