USD/JPY spiraled back down to 76.66 last week but was contained above 76.57/60 support and recovered. Initial bias remains neutral this week first. Above 77.03 will bring stronger rise back to 77.33 resistance. Break there will revive the case of near term bottoming and target a test on 78.22 resistance. On the downside, however, break of 76.57/60 support zone will confirm resumption of whole decline from 79.52 and would bring deeper fall towards 75.56 low.

In the bigger picture, 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 79.60) 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.

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