USD/JPY Weekly Outlook

USD/JPY Weekly Outlook

USD/JPY's consolidation from 96.70 continued last week. The recovery attempt was weak and limited below 96.70 and the pair weakened again. Initial bias is mildly on the downside this week and such correction will likely extend to 61.8% retracement of 90.85 to 96.70 at 93.08 and below before completion. Nonetheless, recent up trend is still expected to resume later for above 96.70 to 100 key resistance level.

In the bigger picture, whole decline from 124.13 should have already completed at 75.56. Stronger medium term rally could be seen back towards 101.65 key support turned resistance level. We'll see how USD/JPY responds at around 100 to judge the underlying medium term momentum for stronger up trend. Meanwhile, break of 90.85 support is needed to be the first sign of medium term topping. Otherwise, we'll stay bullish.

In the long term picture, down trend from 124.13 has completed at 75.56 already. Rise from 75.56 is starting to look impulsive which suggests the start of a long term up trend. We'll stay bullish as long as 84.17 resistance turned support holds and will pay close attention to how USD/JPY reacts on hitting 100 psychological level.