Despite diving to as low as 77.13, USD/JPY staged as strong rebound from there and closed back inside prior range. The development mixed up the near term outlook and we'll stay neutral initially this week. Near term focus is on 79.03 resistance. As long as 79.03 holds, fall fro 84.17 is still in favor to extend to 75.56/76.02 support zone. However, break of 79.03 will indicate that such decline from 84.17 has completed and should then bring stronger rebound back to 80.61 resistance and above.
In the bigger picture, firstly, there is no sign of trend reversal in USD/JPY yet and the larger down trend from 124.13 is still expected to continue. Nonetheless, consolidation pattern from 75.56 should extend for a while below 85.51 first. In any case, we'd stay bearish as long as 85.51 resistance holds and expect an eventual downside breakout.
In the long term picture, with 85.51 resistance intact, there is no scope for trend reversal yet. Though, some more consolidative trading would be seen in medium term above 75.56 first before the long term down trend from 124.13 eventually resumes to 70 psychological level.
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