USD/JPY dipped to 77.43 last week but subsequent recovery and break of 77.90 minor resistance suggests that the pull back from 79.22 has completed. Initial bias is mildly on the upside this week for 78.36 minor resistance first. Break will target a test on 79.22. After all, we're favoring the bullish case that fall from 84.17 is finished at 77.13 already. Hence, in case of another fall, , downside should be contained well above 77.13 and bring rebound. Break of 79.22 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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