USD/JPY Price Analysis: This could be the start of a reversal pattern

USD/JPY 4-hour chart

USD/JPY has moved slightly lower in the session on Thursday but it is not all bad news in the pair. At least the pair is still away from its lows of 104.18 that were seen on 31st July. There has been some decent data for the US so far this week with ISM non-manufacturing and weekly initial claims data both showing improvements. However, the comments from central bankers in the US could have put a downer on the greenback in the afternoon. Fed's Kaplan stated that "rates are going to stay low until we make more progress on goals of maximum employment & price stability". 

Looking at the chart now, the price could be making a higher low. The price did bounce off the 50% Fibonacci retracement but it looks like it might be tested again. Below that there is still the 61.8% and 76.4% that could help stem the losses. The reason why the 50% might be the best is because it confluences with the black support line at 105.30. This area has been used in the past and might be a support zone again.

The indicators are not looking to bullish at the moment. The MACD histogram is red and the signal lines are testing the mid-level. The Relative Strength Index is under the 50 area and could move either way at the moment. 

The overall trend is down at the moment and a break of the black support line could indicate the price might resume the trend. If the orange level on the upside is broken that will give us a much better confirmatory signal that a reversal could be taking place. Lastly, there is a trendline in green and a break of this would be another good sign that the pair is recovering from the lows. 

Additional levels