USD/JPY drew strong support from 75.57 and rebounded last week, indicating that fall from 78.33 might be over already. Further rise will remain mildly in favor this week as long as 76.89 minor support holds. Rise from 76.60 would target a test on 78.22 first. So far, price actions from 79.52 are treated as a consolidation pattern to rebound from 75.56. Break of 78.22 will be the first sign of rise resumption for 79.52 and above. On the downside, however, below 76.89 will flip bias back to the downside with focus on 75.57/60 again. Break there will extend the fall from 79.52 towards 75.56.
In the bigger picture, note again that there is no sign of long term trend reversal in USD/JPY yet even though downside momentum is diminishing with bullish convergence condition in weekly MACD. USD/JPY is still trading inside the falling channel that started back in 2007 at 124.13, and below the falling 55 weeks EMA. Not to mention that it's far below the falling 55 months EMA. Rebound from 75.56 low could extend higher and beyond 80 psychological level. But it could turn out to be a corrective three wave rally in the end. So, we'd at least prefer to see sustained break of 55 weeks EMA (now at 79.70) before considering the case of reversal. And break of 85.51 resistance will need to confirm. Otherwise, anything happens now will be viewed as corrective and an eventual break of 75.56 low to 70 psychological level is still favored.
In the long term picture, 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.