USD/JPY dipped further to as low as 80.56 last week but tried to draw support from 80.58 and turned sideway. Nonetheless, recovery was rather weak. Overall development in yen crosses suggests that yen's rally is not over. We'd mildly favor deeper fall as long as 81.86 minor resistance holds. Decisive break of 80.56 will extend the decline from 84.17 to 61.8% retracement of 76.02 to 84.17 at 79.13. On the upside, though, above 81.86 will indicate completion of pull back from 84.17 and bring rebound.

In the bigger picture, note again that there is bullish convergence condition in weekly MACD. USD/JPY is also sustaining above 55 weeks EMA (Now at 79.96). Monthly MACD is also staying above signal line for some time already. These are signs that USD/JPY has bottomed in medium term at 75.56. The loss of momentum ahead of 85.51 key resistance argues that USD/JPY is merely developing into sideway pattern rather than a strong medium term rebound. At this point, we'd favor more sideway trading between 75.56/85.51 ahead and price actions would remain choppy for a while.

In the long term picture, with 85.51 resistance intact, there is no scope for trend reversal yet. Though, some more consolidative trading would be seen in medium term above 75.56 first before the long term down trend from 124.13 eventually resumes.

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