Technical analysis
The daily time frame shows that the USDJPY pair is testing under the neckline of a large bearish head and shoulders pattern with nearly 200 points of downside potential.
The MACD indicator on the daily time frame is bearish, while the RSI indicator on the mentioned time frame also remains below 50.
What the possible outcomes are
In our most likely scenario, the USDJPY pair will starts to decline back towards the 107.60 level as the mentioned head and shoulders pattern starts to unfold to the downside.
Alternatively, the USDJPY pair will simply continue to remain range bound and trade in a price range between the 109.00 and 110.00 levels.
Key levels
Support 109.00 107.60
Resistance 110.10 110.50
