In the big picture USDJPY is bearish as the pair has made lower lows and lower highs since falling from the June 2015 peak of 125.84 to 105.54. The market is below the 50, 100 and 200-day moving averages, which are all downward sloping, and thus supporting the bearish bias.
In the near term, the market is expected to pause its decline as downward momentum has weakened and the RSI has stopped sloping down and has approached oversold levels.
To the downside, the next level to focus on is at the year-to-date low of 105.54 touched on May 3 and below this the key level of 105.00 would give support.
Major resistance lies at the 108.00 level, which if breached would help bring a recovery but a move above the 114.00 level is needed to weaken the bearish bias. Above 114.00 would result in the market retracing more than half of the downleg (50% Fibonacci) that took place from 125.84 to 105.54.
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