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USD/JPY is approaching the 104.20 July low and Commerzbank’s Karen Jones expects the pair to see a small rebound form this level ahead of further losses.

Key quotes

“USD/JPY has recently severed the six-month uptrend and has sold off to the late July low at 104.20 – this guards the 103.43/78.6% Fibonacci retracement, which is the last defence for the 101.18 March low.” “Intraday rallies should now struggle ahead of the 55-day ma at 106.13.” 

“Please note that we suspect that 104.20 will hold the initial test for a small rebound ahead of further losses. 

“The market will need to regain 107.05, the recent high, to trigger a move to the 200-day ma at 107.72.” 

“We are negative, intraday rallies are indicated to falter around 105.04.”