USD/JPY continued to engage in sideway trading above 84.71 low last week. The pair is still struggling to find a clear direction around 85 level. But in another case, outlook will remain bearish as long as near term channel resistance holds (now at 86.65). Break of 84.71 will confirm that whole fall from 94.97 has resumed and should target 80 psychological level next. Nevertheless, break of mentioned channel resistance will indicate that fall from 94.97 is finished and will turn focus to 88.11 resistance for confirmation.
In the bigger picture, whole down trend from 2007 high of 124.13 is still in progress, but there is no confirmation that it has resumed. Consolidation from 84.81 could still have another rising leg and above 88.11 will bring another rise towards 55 week EMA (now at 91.27). On the downside, sustained trading below 84.81 will confirm long term down trend resumption for 79.75 (1995 low). In any case, we'll stay bearish as long as 94.97 resistance holds.
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.