Lack of Impulse in USD/JPY
Pair’s corrective trading from 105.24 is progressing. USD/JPY has retreated due to lack of impulse. Trading tone is neutral. The consolidation from 105.24 should prolong. If 107.67 is present, further drop remains projected. Following pivot points include: (S1) 106.12; (P) 106.70; (R1) 107.16.
Breach of 105.24 will expand deeper fall from 118.65 and align 100% projection of 118.65 to 108.12 from 114.73 at 104.20. Basing on bullish convergence condition in 4 hour MACD, strong breach of 107.67 resistance will point out short term reversal and trading will turn up on the upside to 110.47 resistance.
In the bigger picture, current development argues that the corrective pattern from 118.65 is extending. The solid break of 61.8% retracement of 98.97 to 118.65 at 106.48 now suggests that the pattern from 125.85 high is possibly extending. Deeper fall could be seen through 98.97 key support (2016 low). This bearish case will now be favored as long as 110.47 resistance holds.