Despite pulling back sharply after reaching 120.52, USD/JPY's downside is still contained above mentioned 119.56 support. Hence, further rally is still in favor to follow. Also, since we're treating price action from 122.17 as consolidation to rally from 114.41 only, sustained trading above 120.35 resistance will indicate fall from 122.05 has already completed and bring retest of 122.17 high.
Meanwhile, below 119.56 will suggest recovery has completed and should bring retest of 118.97 low. Break will encourage further fall towards 161.8% projection of 122.17 to 119.94 from 122.17 at 118.44. But downside should be contained there and above 117.96 support and bring rebound.
In the bigger picture, with medium term up trend from 108.99 remains in force, favor is still on the case that rise from 108.99 represents resumption of long term up trend from 101.66. The preferred interpretation of the rise from 108.99 is that the first move has completed at 117.87. Subsequent price actions to 113.95, 119.86 and 114.41 is treated as interim consolidation that's skewed upward by the rise to 119.86. Rise from 114.41 is treated as resumption of the whole up trend. With this interpretation, next upside target will be 100% projection of 108.99 to 117.87 from 114.41 at 123.29.
However, decisive break of 117.96 support will rise some doubt about this interpretation In such case, a deeper decline should follow to retest medium term rising channel (now at 116.67) first. A break of this channel will swing favors back to the case that another medium term decline should be seen towards 108.99 low before completing the whole long term consolidation that started at 121.38.
Meanwhile, below 119.56 will suggest recovery has completed and should bring retest of 118.97 low. Break will encourage further fall towards 161.8% projection of 122.17 to 119.94 from 122.17 at 118.44. But downside should be contained there and above 117.96 support and bring rebound.
In the bigger picture, with medium term up trend from 108.99 remains in force, favor is still on the case that rise from 108.99 represents resumption of long term up trend from 101.66. The preferred interpretation of the rise from 108.99 is that the first move has completed at 117.87. Subsequent price actions to 113.95, 119.86 and 114.41 is treated as interim consolidation that's skewed upward by the rise to 119.86. Rise from 114.41 is treated as resumption of the whole up trend. With this interpretation, next upside target will be 100% projection of 108.99 to 117.87 from 114.41 at 123.29.
However, decisive break of 117.96 support will rise some doubt about this interpretation In such case, a deeper decline should follow to retest medium term rising channel (now at 116.67) first. A break of this channel will swing favors back to the case that another medium term decline should be seen towards 108.99 low before completing the whole long term consolidation that started at 121.38.
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