Much volatility was seen in USD/JPY last week as the pair first jumped to as high as 79.22 then retreated sharply to close at 78.16. Overall, we'd slightly favoring the bullish case that fall from 84.17 is finished at 77.13 already. Hence, while deeper decline might be seen in near term, downside should be contained well above 77.13 and bring rebound. Above 78.46 minor resistance will flip bias back to the upside for 79.22 first. Break will target 80.61 resistance (50% retracement of 84.17 to 77.13 at 80.65).

In the bigger picture, firstly, there is no sign of trend 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 any case, 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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