“¢ The pair remained heavily offered for the fifth consecutive session and tumbled to three-month lows, farther below the key 110.00 psychological mark amid the prevailing risk-off mood.
“¢ Given this week’s bearish gap below a four-month-old ascending trend-line, a subsequent fall below 50% Fibo. level of the 107.47-112.40 up-move was seen as a key trigger for bearish traders.
Adding to this, the fact that the pair remains well below its important moving averages – 50, 100 & 200-day SMAs, further support prospects for an extension of the ongoing bearish trajectory from yearly tops set on April 24.
Meanwhile, technical indicators on hourly/daily charts are already pointing to oversold conditions and suggest some near-term consolidation/modest recovery, warranting caution before placing any aggressive bearish bets.
However, any attempted bounce back towards the 110.00 handle might still be seen as an opportunity to initiate some fresh bearish positions for an eventual slide further towards testing sub-109.00 level in the near-term.
USD/JPY daily chart
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