USD/JPY is expected to continue the dowside movement. The pair has recorded a succession of lower tops and lower bottoms since Apr 18, which confirmed a bearish outlook. The declining 20-period and 50-period moving averages are playing resistance roles and maintain the downside bias. The relative strength index is below its neutrality level at 50 and lacks upward momentum.
As long as 109.20 holds on the upside, look for a further drop towards 108.50 and even 108.20 in extension.
The pair is trading below its pivot point. It is likely to trade in a lower range as long as it remains below the pivot point. Short positions are recommended with the first target at 108.50. A break below this target will move the pair further downwards to 108.20. The pivot point stands at 109.20. If the price moves in the opposite direction and bounces back from the support level, it will go above its pivot point. It is likely to move further to the upside. According to that scenario, long positions are recommended with the first target at 108.50 and the second one at 108.20.
Resistance levels: 109.50, 109.85, and 110.15
Support levels: 108.50, 108.20, and 108.00
