Search ForexCrunch
  • USD/JPY attracts some dip-buying near the 106.95-90 horizontal support.
  • Bearish technical set-ups support prospects for a further near-term slide.

The USD/JPY pair showed some resilience below the 107.00 round-figure mark and attracted some dip-buying near monthly lows set on April 1. The intraday bounce of around 55-60 pips reinforced strong horizontal support near the 106.95-90.

This along with a descending trend-line constitutes towards the formation of a descending triangle on short-term charts. The mentioned trend-line extends from late-March swing highs to the 111.65-70 region and should act as a key hurdle for bulls.

USD/JPY 4-hourly chart

fxsoriginal

Meanwhile, the recent leg down over the past one week or so has been along a descending trend-channel. The combination of bearish patterns clearly indicated that the recent bearish pressure surrounding the major might still be far from being over.

1-hourly chart

fxsoriginal

The negative outlook is further reinforced by the fact that technical indicators on the daily chart have just started drifting into the bearish territory. Moreover, oscillators on the 4-hourly chart have also recovered from slightly oversold territory.

Hence, any subsequent recovery towards the top end of the descending trend-channel, currently near the 107.80 region, might still be seen as a selling opportunity. This should eventually cap the upside near the triangle resistance, around the 108.00 mark.

Technical levels to watch