USD/JPY retreated sharply to as low as 79.13 last week but was contained well above 78.60 support so far. Initial bias remains neutral this week first. With 78.60 support intact, we'd expect further rally ahead and break of 80.61 will target 61.8% retracement of 84.17 to 77.66 at 81.68 and above. Though, below 78.60 will likely extend fall from 84.17 beyond 77.66.
In the bigger picture, firstly, there is no sign of reversal in USD/JPY yet and the larger down trend from 124.13 is still expected to continue. Nonetheless, consolidation pattern from 75.56 should extend for a while below 85.51 first. In anyway, we'd stay bearish as long as 85.51 resistance holds and expect an eventual downside breakout.
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 to 70 psychological level.
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