USD/JPY surged to as high as 92.94 last week and the strong break of 92.14 resistance confirms that consolidation from 93.74 has completed with three waves down to 88.13 and whole rally from 84.81 is resuming. USD/JPY lost some momentum after hitting 100% projection of 88.13 to 91.08 from 89.83 at 92.78. Initial bias is neutral this week and some consolidations might be seen first. Nevertheless, downside should be contained well above 91.08 resistance turned support and bring rally resumption. Above 9.294 will bring retest of 93.74 high next.
In the bigger picture, current development suggests that rise from 84.81 is still in progress and on resumption, 55 days EMA (now at 92.96) will be firmly taken out. Also, considering bullish convergence condition in daily MACD and RSI, whole medium term fall from 124.13 has possibly completed too. Break of 93.74 resistance will confirm this bullish case and will target a test on 101.43/65 medium term resistance zone next. On the downside, break of 89.83 support is needed to indicate that rise from 88.13 is completed. Otherwise, the bullish outlook will remain in favor.
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.