USD/JPY fell to 155.01 last week but has since recovered. Initial bias remains neutral this week first. On the downside, a break of 155.01 will resume the decline from 160.71 to 152.25 support after that. However, on the upside, a strong break of 157.92 would indicate that the pullback from 160.71 has been completed, shifting the bias back to the upside for a stronger recovery.
In the bigger picture, for now, the corrective pattern from 161.94 (2024 high) remains completed at 139.87. A rally from there is seen as a resumption of the long-term uptrend. Therefore, a break of 161.94 is expected at a later stage to resume the long-term uptrend. However, a sustained break of the 55 W EMA (now at 154.02) will weaken this view and bring back a deeper decline towards 139.87 to extend the pattern from 161.94.
In the longer term picture, the uptrend from 75.56 (2011 low) is still in progress and may be ready to resume. A strong break at 161.94 would target a 61.8% forecast of 102.58 (2020 low) to 161.94 (2024 high) from 139.87 at 176.55 in the medium term. The long-term outlook will remain bullish as long as the support at 139.87 holds, even in the event of a deep pullback.
