USD/JPY Price Analysis: Bears challenge monthly ascending trend-line, around mid-105.00s

USD/JPY witnessed a dramatic intraday turnaround from the 107.00 neighbourhood.
The set-up supports prospects for additional weakness, even below the 105.00 mark.
Slightly oversold RSI on the 1-hourly chart warrants some caution for bearish traders.

Haresh Menghani FXStreet

The USD/JPY pair extended its intraday rejection slide from the 107.00 neighbourhood and dropped to fresh weekly lows, around mid-105.00s during the mid-European session. The latter marks monthly ascending trend-line support, which if broken decisively will pave the way for additional weakness amid the heavily offered tone around the USD.

Meanwhile, technical indicators on 4-hourly/daily charts have again started drifting into the negative territory and support prospects for an eventual breakthrough the mentioned support. However, RSI (14) on the 1-hourly chart is already flashing slightly oversold conditions. This, in turn, warrants some caution for aggressive bearish traders.

Hence, it will be prudent to wait for some strong follow-through selling below the mentioned trend-line support before positioning for any further depreciating move. The pair might then accelerate the fall towards monthly lows, just ahead of the key 105.00 psychological mark, en-route the recent daily closing, around the 104.70 region.

On the flip side, any attempted recovery might now confront some fresh supply and remained capped near the 106.00 mark. That said, a sustained strength beyond might trigger a short-covering move and assist the pair to aim back to reclaiming the 107.00 level with some intermediate resistance near the 106.35-55 region.

USD/JPY 4-hourly chart

Technical levels to watch

USD/JPY

Overview
Today last price	105.68
Today Daily Change	-0.87
Today Daily Change %	-0.82
Today daily open	106.55

Trends
Daily SMA20	106.08
Daily SMA50	106.55
Daily SMA100	107.02
Daily SMA200	108

Levels
Previous Daily High	106.7
Previous Daily Low	105.6
Previous Weekly High	106.68
Previous Weekly Low	105.1
Previous Monthly High	108.16
Previous Monthly Low	104.19
Daily Fibonacci 38.2%	106.28
Daily Fibonacci 61.8%	106.02
Daily Pivot Point S1	105.87
Daily Pivot Point S2	105.19
Daily Pivot Point S3	104.77
Daily Pivot Point R1	106.97
Daily Pivot Point R2	107.38
Daily Pivot Point R3	108.07

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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