USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 105.46; (P) 105.82; (R1) 106.08;

USD/JPY drops sharply today but stays in range of 105.10/107.05. Intraday bias remains neutral first. On the downside, break of 105.10 will bring retest of 104.18 low first. Break there will resume whole decline from 111.71. On the upside, break of 107.05 will revive the case that pull back from 111.71 has completed with three waves down to 104.18. Intraday bias will be turned to the upside for 109.85 resistance.

In the bigger picture, USD/JPY is still staying in long term falling channel that started back in 118.65 (Dec. 2016). Hence, there is no clear indication of trend reversal yet. The down trend could still extend through 101.18 low. However, sustained break of 112.22 should confirm completion of the down trend and turn outlook bullish for 118.65 and above.