USDJPY, after a strong rally that totally reversed the May-June downward trend, has started a new downtrend once again. The pair is currently forming a bearish short-term bias, breaking its recent upleg and is struggling to hold on to the key level of 113.
According to the technical indicators, the short-term risk is to the downside as both the RSI and the MACD are below their positive thresholds and do not show any sign of upward movement. The RSI has been moving closer to neutral ground under 50, while the MACD has been sloping down in negative territory. Furthermore, another bearish signal is given by the Tenkan-Sen dropping below the Kinjun-Sen.
The market has been recently testing the 23.6% Fibonacci retracement level of the June to July upleg, from 108.77 to 114.48. Should the price fall, a first support could be found in the area near to the 38.2% Fibonacci level of 112.29, where the bottom of the Ichimoku cloud is also located. A deeper decline would hit the 50% Fibonacci mark of 112.63.
Should the pair go up, the zone where the 50-4-hour moving average of 113.48 and the Kinjun- Sen point of 113.67 are placed could provide resistance. Further increases, would target the latest peak of 114.48.
