USD/JPY's recovery from 88.97 extended further to as high as 91.39 last week. The development suggests that fall from 93.62 is completed. Nevertheless, there is no change in the view that price actions from 88.25 are consolidative in nature. Hence, while strong rebound might be seen initially this week, we'd expect upside to be limited below 93.62 resistance and bring another fall. On the downside, below 89.81 minor support will indicate that recovery from 88.97 is finished and flip intraday bias back to the downside for 88.13/25 support zone.
In the bigger picture, considering that USD/JPY failed to sustained above 55 weeks EMA and dropped sharply, we're now slightly favoring the case that down trend from 124.13 is not over. Break of 88.13 support will indicate that rebound from 84.81 has completed with three waves up to 94.97 already. The corrective structure will affirm the bearish case and pave the way to a new low below 84.81. On the upside, however, break of 94.97 will revive the case that 84.81 is already the long term bottom and will target 101.43/65 medium term resistance zone for confirming this bullish case.
In the long term picture, downside momentum is clearly diminishing with monthly MACD staying above signal line and bullish convergence condition in weekly MACD. However, the reversal scenario is not confirmed by break of 101.43/65 medium term resistance zone yet. We'll stay neutral first.