USD/JPY continued to consolidate above 79.58 temporary low last week and outlook remains unchanged. With 80.15 minor support intact, another recovery could still be seen. But evening that case, upside should be limited below 82.76 resistance and bring fall resumption. Below 80.15 minor support will flip bias back to the downside. Further break of 79.58 will target a retest on 76.40 spike low. Nevertheless, break of 82.76 resistance will turn focus back to 85.51 resistance instead.
In the bigger picture, note that USD/JPY's rebound from 76.40 was held by medium term long term falling trend line as well as the 55 weeks EMA. Thus, down trend from 124.13 could still be in progress. Current fall from 85.51 might now extend through 76.40 for a new record low. In any case, break of 85.51 is now needed to revive the case that USD/JPY's down trend has finished. Otherwise, we'll stay cautiously bearish in the pair.
In the long term picture, the minimum target of trend resumption, that is, a break of 79.75 low (1995 low) was met. While the rebound to 85.51 was strong, there is no indication of reversal of the multi-decade down trend yet. We'd look at the structure of the rise, as well as whether USD/JPY could take out 100 psychological level before giving favor to the trend reversal case. Otherwise, we'll treat current price actions as part of a long term consolidation pattern at best.
