USD/JPY dipped to 157.99 last week before recovering, leaving the pair's near-term bias neutral. The 155.01 support cluster remains the key level for the broader up trend toward 163.97, while a firm break below it would open a deeper fall toward 139.87.
USD/JPY fell to 157.99 last week before recovering, and the pair's initial bias stays neutral heading into this week's session. A break below 157.99 would extend the fall from 159.76 and open a retest of the 155.22 low. A fresh rise, however, would meet strong resistance in the 159.59 to 160.62 zone, which marks the 50% and 61.8% retracement of the move from 163.97 to 155.22.
In the bigger picture, the broader up trend toward 163.97 is still expected to continue once the current correction completes, as long as 155.01 cluster support holds — the 38.2% retracement of the 139.87-to-163.97 range at 154.76. A firm break of 155.01, though, would raise the chance that USD/JPY has already entered a larger-scale correction. That scenario would open a deeper fall back toward the 139.87 2025 low in the medium term.
The long-term up trend from the 75.56 2011 low remains in progress, with the next target at the 61.8% projection of the 102.58-to-161.94 range from 139.87, placing it at 176.55 in the medium term. The long-term outlook stays bullish as long as the 139.87 support holds, even in the case of a deep pullback.
Source: ActionForex
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