USD/JPY Forecast: Is the risk-on a trap? Falling channel still intact
Daily Pivots: (S1) 108.79; (P) 109.11; (R1) 109.34;
The strong rebound and break of 110.10 resistance indicates short term bottoming at 108.12, on bullish convergence condition in 4 hour MACD. Intraday bias is turned back to the upside for 111.58 support turned resistance. Sustained break there will argue that fall from 118.65 is merely a corrective move and has completed. Outlook will then be turned bullish for 115.49 resistance and above. Meanwhile, below 108.87 minor support will turn bias to the downside and extend the whole decline from 118.65 to 61.8% retracement of 98.97 to 118.65 at 106.48.
In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. Current development suggests that it’s not completed yet and is extending. In case of deeper decline, downside should be contained by 61.8% retracement of 75.56 to 125.85 at 94.77 to bring rebound. Rise from 75.56 is still expected to resume later after the correction from 125.85 completes.