The USD/JPY pair continued to rebound from 155.01 last week but lost momentum after reaching 159.33. Initial bias remains neutral this week first. Above 159.24 the high price will target 160.71. It is expected that there will be strong resistance to the start of the third phase of the corrective pattern in the near term. On the downside, breaking the support at 157.30 will shift the bias towards the downside to retest 155.01.
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 154.36) 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.
