USD/JPY's pull back from 90.75 was contained at 97.36 last week and rebounded strongly. Initial bias remains mildly on the upside this week with 88.60 minor support intact and further rise could be seen to 90.75 resistance first. Break there will indicate that whole rise from 84.81 is resuming for resistance at 92.31. On the downside, below 88.60 will turn intraday bias neutral again. Further break of 87.36 will affirm the case that rebound from 84.81 has completed at 90.75 already and will bring deeper fall to retest this 84.81 low instead.
In the bigger picture, as noted before, there is no clear indication of medium term reversal yet as USD/JPY is still trading well below 55 weeks EMA (now at 94.54) as well as the trend line resistance at 94.45. Whole down trend from 124.13 could still be in progress and might extend towards 1995 low of 79.75 after completing the rebound from 84.81. However, note that sustained trading above the medium trend line resistance will be the first signal of medium term reversal and in such case, focus will turn to 101.43 resistance for confirmation.
In the long term picture, fall from 124.13 is still in progress after breaking out of the long term triangle pattern and a test on 79.75 low made in 1995 should be seen. The structure of the current fall from 101.43 will be important to determine whether 79.75 will be taken out decisively. Acceleration of the current fall from 101.43 will build up downside momentum which should then pull monthly MACD away from the signal line and will indicate that fall from 124.13 is resuming the multi-decade down trend. However, loss of downside momentum in the coming fall will indicate that it's possibly just part of a long term sideway pattern from 79.95 and strong support should be seen after breaching 79.75 to conclude the medium term fall.
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