USD/JPY's down trend extend further last week and reached as low as 85.01. Initial bias remains on the downside this week for 84.81 low. Break there will confirm that medium term down trend has resumed and should target 80 psychological level next. On the upside, above 85.72 minor resistance will turn intraday bias neutral and bring recovery. But after all, outlook will remain bearish as long as 88.11 resistance holds and we'd expect recent decline to extend further.

In the bigger picture, whole down trend from 2007 high of 124.13 is still in progress. Fall from 94.97 is tentatively treated as resumption of such down trend and should extend beyond 84.81 low. Break of 84.81 will target next key level of 79.75 (1995 low).On the upside, break of 88.11 resistance will indicate that fall from 94.97 is possibly completed and bring stronger rebound. However, note that break of 94.97 resistance is still 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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