- The USD/JPY pair struggled to register any meaningful recovery and remained well within the striking distance of multi-month lows set on Friday.
- Near-term oversold conditions on the daily chart seemed to be the only factor lending some support, though the uptick lacked any strong conviction.
Looking at a slightly bigger picture, the pair has been trending lower along a short-term descending trend-channel from yearly tops – set on April 24, indicating a well-established near-term bearish trend.
This coupled with the fact that the pair has found acceptance below 61.8% Fibonacci retracement level of the 104.69-112.40 up-move further support prospects for an extension of the bearish trajectory.
A sustained break below the 107.00 handle will add credence to the negative outlook and turn the pair vulnerable to aim towards challenging the trend-channel support, currently near the 106.35 region.
On the flip side, any attempted recovery move might now confront fresh supply near the 108.00 handle ahead of the 108.50-70 resistance – marking 50% Fibo. level and also nearing the trend-channel hurdle.
Only a convincing break through the mentioned confluence barrier might negate the bearish outlook and prompt some aggressive short-covering move, lifting the pair beyond the 109.00 round figure mark.
USD/JPY daily chart
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