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USDJPY is currently trading within the long-term descending channel starting Jan ’17.
Despite trading on the upper regression zone, the current structure suggests that the pair could decline towards the regression line below 106 once again.
The break of the trendline support TS1 will increase the chances of prices falling within the 106-107 range. With the 50% Fibo near the 106.50 round support, the level is attractive. A break of the 107 figure is required first though.
In case bears fail in their first attempt, a pullback up to the trendline resistance TR1 can be expected. Although unlikely, the retracement could get us back to 108.25, where further clues will be provided. This is currently supported by the RSI(9) divergence.
When we take a closer look at the shorter-term outlook, however, we can see that 108 will be a firm level to break in case bulls start increasing their bets.
The plummet following the break of the TR1 trendline could continue towards the short-term 78.6% ...
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