USD/JPY Weekly Outlook
USD/JPY's recovery from 88.00 continued last week and reached as high as 92.11 so far. Initial bias remains on the upside this week and further rise could still be seen to 92.52 resistance. Nevertheless, rise from 88.00 is still treated as a correction to fall from 97.77 only. Hence, upside is expected to be limited by 92.52 resistance and bring fall resumption. Below 91.12 will flip intraday bias back to the downside first. Further break of 90.07 will target a retest of 88.00 low next. However, break of 92.52 resistance will indicate that whole fall from 97.77 has completed and stronger rebound should then be seen towards medium term trend line resistance at 95.49.
In the bigger picture, there is no change in the bearish outlook with 92.52 resistance intact. Fall from 101.43 is treated as resumption of the whole down trend from 124.13. Break of 87.12 low will confirm resumption of this down trend and should target next key level of 1995 low at 79.75. However, note that break of 92.52 resistance will firstly suggest that fall from 97.77 has completed. Additionally, this will raise the possibility that whole decline from 101.43 has finished with three waves down to 88.00 after meeting 100% projection of 101.43 to 91.73 from 97.77 at 88.07. The three wave structure will in turn indicate that rise from 87.12 is going to resume. Further break of 97.77 will target a retest of 101.43 instead.
In the long term picture, firstly, fall from 124.13 is still in progress. Such decline is treated as part of the long term down trend after triangle consolidation from 79.75 has completed at 124.13. In other words, a break of 1995 low of 79.75 is likely as fall from 124.13 extends. Break of 97.77 resistance is needed to be the first indication of bottoming in medium to longer term. Otherwise, outlook will remain bearish.