USD/JPY dropped sharply last week, showing no clear signs of bottoming out. The initial bias remains tilted to the downside this week, with attention focused on the key support zone between 154.76 and 155.01. This area is expected to provide strong support and trigger a rebound; however, a decisive break below it would carry broader bearish implications. On the upside, a move above 157.35 minor resistance would shift the intraday bias to neutral initially.
In the broader context, as long as the 155.01 cluster support—coinciding with the 38.2% Fibonacci retracement of the 139.87 to 163.97 advance at 154.76—holds, the larger uptrend is still anticipated to resume toward 163.97 once the current correction concludes. Conversely, a firm break of 155.01 would increase the likelihood that USD/JPY has entered a larger-scale correction, opening the door for a deeper decline toward the 61.8% retracement level at 149.07.
From a long-term perspective, the outlook remains bullish provided the 139.87 support level holds, even in the event of a deep pullback. The uptrend originating from the 2011 low at 75.56 is still favored to resume after the current correction from 163.97 runs its course.
