USD/JPY's rally accelerated to as high as 81.20 last week and there is no signa of topping yet. Initial bias remains on the upside this week for 61.8% retracement of 85.51 to 75.56 at 81.70 first. Break will target a test on key resistance level at 85.51. On the downside, break of 79.85 minor support is needed to indicate short term topping or we'll stay bullish even in case of retreat.
In the bigger picture, the case of long term reversal is starting to build up as USD/JPY is trading above the long term falling channel that started at 2007 high of 124.13. As noted before, bullish convergence condition is present in weekly MACD for some time already. Sustained trading above 79.52 at least confirms that 75.65 is a medium term bottom. Further break of 85.51 will indicate reversal and target a test on 101.22 support turned resistance, which is close to 100 psychological level.
In the long term picture, 75.65 is starting to look like an important bottom in USD/JPY and stronger rebound is now in favor in medium term. However, we're anticipating strong resistance at around 100 psychological level to limit upside of the current rally from 75.56, at least in initial attempt. At this point, we're slightly favoring the case that USD/JPY is turning into a long term sideway pattern between 75/100.