USD/JPY's consolidation from 86.96 continued last week and with a sort term bottom in place, such consolidation could extend further with another rise. Nevertheless, upside is still expected to be limited below 90.27 resistance and bring fall resumption. Below 86.96 will target a retest on 84.81 low.

In the bigger picture, the break of 88.13 support confirms that medium term rebound from 84.81 has completed with three waves up to 94.97 already. The corrective structure in turn indicates that whole down trend from 2007 high of 124.13 is still in progress. Retest of 84.81 should be seen next and break will confirm down trend resumption for next key level of 79.75 (1995 low). On the upside, break of 94.97 resistance is needed to be the first sign of medium term reversal. Otherwise, we'll stay bearish.

In the long term picture, current development suggests that USD/JPY has not bottomed out yet and the down trend will extend beyond 84.81 to 79.75. However, we'd be cautious on any sign of loss of momentum and reversal on next fall.

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