USDJPY touched a 4-month low during today’s European session, challenging the 110.51 price level. The bearish picture is supported by the momentum indicators, while prices are in process to end the day below the 110.80 barrier. In addition, the pair recorded the fifth consecutive red day.
In the daily timeframe, the MACD oscillator is strengthening its downtrend as it is holding below the trigger and zero lines. Moreover, the RSI indicator had a pullback from the positive territory and is approaching the oversold zone.
As it stands, if the bears are strong enough to push the price lower, dollar/yen could extend its losses towards the lower boundary of the symmetrical triangle near 109.60. In case of a break below 109.60, this could open the door for the next immediate support level at 108.10 confirming the bearish tendency.
On the upside, if the bulls take control, the pair may move towards the 113.75 significant resistance level but, it needs to go through the 20 and 40 simple moving average on the short to medium-term timeframe. This is the less expected scenario as the price has a strong negative momentum.
It is worth mentioning that USDJPY has been trading within a symmetrical triangle on a long-term basis since May 2015. Also, the pair has been establishing and trading within a sideways range between the upper boundary of 108.10 and the lower boundary of 114.70, roughly around the 112.00 key level, over the past ten months.
