USD/JPY Price Analysis: 104.00 mark is the next relevant target for bearish traders
- USD/JPY added to its intraday losses and fell below a short-term ascending trend-channel support.
- The set-up favours bearish traders and supports prospects for weakness towards the 104.00 mark.
- Any attempted recovery move is likely to remain capped near the key 105.00 psychological mark.
The USD/JPY pair extended its steady intraday decline and fell to two-day lows, around the 104.60-55 region during the first half of the European trading session. The downward momentum dragged the pair below the lower boundary of a near one-week-old ascending channel, which constituted the formation of a bearish flag chart pattern.
The bearish breakdown is further reinforced by the fact that technical indicators on hourly/daily charts are holding in the negative territory and are still far from being in the oversold territory. Hence, some follow-through weakness towards September monthly swing lows, around the 104.00 mark, now looks a distinct possibility.
Some follow-through weakness might prompt some technical selling and turn the pair vulnerable to prolong its bearish trajectory. The USD/JPY pair might then accelerate the fall to the 103.50-45 intermediate support before eventually dropping further below the 103.00 mark, towards March daily closing lows, around the 102.35 zone.
On the flip side, any attempted recovery might now be seen as a selling opportunity and runs the risk of fizzling out rather quickly near the key 105.00 psychological mark. The latter coincides with the top end of the mentioned trend-channel, which if cleared decisively will negate the bearish outlook and prompt some short-covering move.
USD/JPY 1-hourly chart
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Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
