USD/JPY fell below the key 105 level which was previously acting as major support but has now turned into resistance.
The failure of the market to make a sustained move higher from 105.00 would suggest that a top is now in place at 107.48 with a bias for further downside. Therefore, the rise from 99.98 to 107.48 (July 8 to July 21 rally) was probably a corrective move and the market could resume its downtrend that has been in place since the end of 2015. Prices have been falling in a downward channel since then.
RSI is trending down and has dipped below 50 into bearish territory which indicates the possibility of further downside momentum.
Immediate support is this week’s low of 103.98. A break below the 50% Fibonacci at 103.74 (of the upleg from 99.98-107.48) would accelerate a decline towards this month’s low of 99.98.
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