USD/JPY rebound strongly last week on massive Japan intervention. But so far, upside was limited below near term falling trend line resistance and the pair also failed to sustain above the falling 55 days EMA. there is no confirmation of reversal yet. Initial bias is neutral this week. On the downside, below 77.84 minor support will indicate that rebound from 76.28 has completed and should flip bias back to the downside to extend recent decline from 85.51. On the upside, above 890.23 will bring another rise towards key resistance level at 82.22 (which is close to 61.8% retracement of 85.51 to 76.28 at 81.98). Again, we'd prefer to see sustained break of 82.22 before confirm reversal, or we won't turn bullish in USD/JPY

In the bigger picture, USD/JPY is still staying well inside the falling channel that started back in 2007 at 124.13. There is no indication of trend reversal yet even though medium term downside momentum is diminishing with bullish convergence condition in weekly MACD. Such down trend is still in favor to continue to 70 psychological level. In any case, break of 82.22 resistance is first needed to indicate completion of fall from 85.51. Secondly, break of 85.51 is needed to revive the case that USD/JPY's down trend has finished. Otherwise, we'll stay cautiously bearish in the pair.

In the long term picture, the minimum target of trend resumption, that is, a break of 79.75 low (1995 low) was met. While the rebound to 85.51 was strong, there is no indication of reversal of the multi-decade down trend yet. We'd look at the structure of the rise, as well as whether USD/JPY could take out 100 psychological level before giving favor to the trend reversal case. Otherwise, we'll treat current price actions as part of a long term consolidation pattern at best.

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