USD/JPY rebounded on Friday after reaching important supports above 104 nL2N2F20L7, but it would have to clear resistance at 105.68-70 to trigger a bigger correction within the broader downtrend that could still test March's 101.18 low.
Today's 104.195 EBS low brushed support at 104.17, the 161.8% Fibo off the July 1 high and July 10 low.
It's also the ABC objective taken from late-March and June highs at 104.12, with 2019's spike low at 104.10 just below.
Oversold daily studies, month-end book-squaring and Japanese finance ministry jawboning nL3N2F21AN about the yen's "rapid" rise have already lifted USD/JPY back above the 61.8% Fibo of March's 101.18-111.715 pandemic recovery at 105.20.
Closes below there the last three sessions and what's set to be a very bearish monthly close suggest a near-term rebound is just a correction within the broader downtrend.
That the Fibos of the July drop align closely with prior important daily highs and lows raises confidence in the retracement scenario, particularly the 38.2% and 61.8% at 105.71 and 106.64.
A similar set of retracements is seen in the EUR/USD uptrend, the main driver of the dollar downtrend this month.
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