USD/JPY remained range-bound last week. The initial bias for this week is neutral, though a further advance is slightly favored provided the 156.36 support level holds. A break above 159.02 would extend the recovery from 152.87 toward the key structural resistance at 160.38. Conversely, a violation of 156.36 would signal a deeper decline back to the 152.87 support.
From a broader perspective, the price action since the 163.97 medium-term peak is viewed as a correction of the advance from 139.87. The initial leg of this correction may have concluded at 152.87, just above the 152.25 structural support. A sustained break above the 55-day EMA (currently at 158.09) would open the path for a retest of the 163.97 high, though strong resistance is expected to limit gains there. Another downward leg is likely required before the corrective pattern completes.
The long-term outlook remains bullish as long as the 139.87 support holds, even in the event of a deep pullback. The uptrend originating from the 2011 low of 75.56 is still expected to resume once the current correction from 163.97 runs its course.
