USD/JPY is tumbling to a new five-month low near 106.77 today, struggling within the downward sloping channel. The RSI is trending south in the oversold zone, while the MACD is heading down below 0, posting a bearish cross with its trigger line. Both are signaling more losses in the daily timeframe.
If the price continues lower and drops beneath today’s low, this could open the door for the 105.65 support, taken from the bottom on April 2018. Even sharper losses would bring into range the ten-month low of 104.64.
Should the pair manage to return up it could open the way for the 107.80 resistance level, registered by the inside swing bottom on June 5. However, prices would need to climb as high as the 23.6% Fibonacci retracement level of the down-leg from 112.40 to 106.77 near 108.10 and break the bearish pattern to the upside to turn the bias back to slightly bullish.
Concluding, in the short-term, the bearish phase remains in play especially as long as prices continue to trade below 109.00.
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