USD/JPY Price Analysis: Bull struggle to capitalize on an inside day breakout

• USD/JPY is feeling the pull of gravity with the US stock futures reporting losses. 
• The technical bias remains bullish with the pair holding well above Tuesday’s low. 

USD/JPY is flashing red in Asia, contradicting the bullish technical setup on the daily chart, possibly due to losses in the US stock futures and the resulting haven demand for the anti-risk yen. 

The pair is currently trading at 107.20, representing a 0.5% drop on the day, having hit a high of 107.71 in early Asia. Meanwhile, the S&P 500 futures are currently down 2.19%. versus the 3.2% drop seen early Wednesday. 

USD/JPY’s decline comes a day after the pair closed above 107.57, validating the inside day candlestick pattern created on Monday. 

An inside day occurs when the pair the specific day’s trading range falls with the preceding day’s high and low and represents indecision or congestion. 

Tuesday’s close above Monday’s high of 107.57 marked a bullish breakout of the price consolidation and opened the doors for a stronger rise toward 109.00.

With the pair holding well above 105.86 (Tuesday’s low), the inside day breakout is still valid. Put simply, the immediate bias remains bullish. 

Daily chart

Trend: Bullish

Technical levels