USD/JPY technical analysis: Risks skewed to the downside

USD/JPY is looking south, having created candles with long upper wicks.
The pair is still trapped in a bearish channel.

Omkar Godbole FXStreet Contributor

USD/JPY risks falling back toward 108.00 today, having charted back-to-back daily candles with long upper shadows.

A candle with a long upper shadow is considered a sign of buyer exhaustion.

A break below 108.31 (Monday’s low) today would validate the buyer exhaustion near 108.80 signaled by the daily candles with long upper shadows and could yield a drop to fresh 2019 lows below 107.81.

The outlook would turn bullish if and when the spot exits the falling channel with a move above the upper edge of the bearish channel, currently at 109.32. The pair is currently trading at 108.45, representing minor gains on the day.

Daily chart

Trend: Bearish

Pivot levels

1. R3 109.22
2. R2 109.01
3. R1 108.76
PP 108.56
1. S1 108.31
2. S2 108.1
3. S3 107.86

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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