- USD / JPY is moving lower for the second day in a row.
- The false breakout of the previous daily high and the RSI retracing from the overbought area supports the bearish pattern.
- The 10-day SMA and bullish trend lines since January will test the pair’s bears.
USD / JPY is moving slightly lower, around the 105.80 region, at the start of the European session on Thursday.
The pair hit a fresh five-month high the day before, at 106.22, before cutting back some of its gains. The resulting candle on the daily chart shows an evening star pattern, a sign of bullish exhaustion and the entry of sellers.
A drop in the pair below the high of the beginning of the month, around 105.75, could favor the downside momentum.
Lower down, the USD / JPY bears are targeting the 10-day SMA at 105.23. However, a further decline could challenge two support lines extended from Jan 27 and Jan 6, respectively, around 104.90 and 104.65.
On the contrary, the round level of 106.00 and the latest high near 106.22 will test buyers of the USD / JPY in the short term. However, any further rise points to an August 2020 high near 107.00.
USD / JPY daily chart
USD / JPY technical levels
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