USD/JPY’s outlook remains neutral for the moment. Consolidation from 110.66 may still be in progress and below 109.01 will encourage deeper fall to retest 108.13 low. Though, downside is expected to be contained well above 106.04 support and bring rally resumption. On the upside, however, above 110.27 will revive original case that correction from 110.66 has completed and bring retest of this high. Break will confirm that recent rally has resumed for next target of 61.8% projection of 95.77 to 108.58 from 103.76 at 111.68.

In the bigger picture, USD/JPY has made a medium term bottom after down trend from 124.13 has just met 76.4% retracement of 79.75 to 147.68 at 95.78. Rebound from 95.77 is still in progress and should be targeting 61.8% projection of 95.77 to 108.58 from 103.76 at 111.68 first. Break will bring further rise to 61.8% retracement of 124.13 to 95.77 at 113.30.

However, considering bearish divergence condition in daily MACD, break of 106.04 support and sustained trading below the trend line support (99.57, 103.75, now at 106.21) will argue that whole medium term rebound from 95.77 has completed. Focus will then be turned back to 103.76 support and bring will confirm this case and turn outlook bearish again.