USD/JPY's correction from 84.17 extended lower last week and initial bias remains on the downside this week for 81.86 support. At this point, we'd expect strong support from 80.58/81.86 support zone to contain downside and bring rebound. Rally from 76.02 is still expected to resume sooner or later. On the upside, above 82.94 minor resistance will flip bias back to the upside. Further break of 84.17 will target 85.51 key resistance level next.
In the bigger picture, a medium term bottom is at least formed at 75.56 on bullish convergence condition in weekly MACD. Focus remains on 85.51 key resistance. Break there will indicate the medium term down trend from 2007 high of 124.13 is completed and stronger rise should be seen to target a test on 101.22 support turned resistance, which is close to 100 psychological level. Meanwhile, failure to sustain above 85.51 will bring sideway trading between 75.56/85.51 in medium term instead.
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.