USD/JPY Price Analysis: Sees more downside below 134.30 on H&S formation

• The H&S formation has strengthened the odds of a bearish reversal in the asset
• Greenback bulls are failing to defend the 50-EMA.
• The RSI (14) is attempting to violate 60.00 but is facing significant hurdles.

The USD/JPY pair has witnessed a regular fall after multiple failed attempts of overstepping the critical resistance of 135.60 for the past three trading sessions. The asset is auctioning inside Thursday’s range since Friday, which is marked in the 134.27-136.22 area.

The formation of a Head and Shoulder (H&S) chart pattern on an hourly scale has bolstered the odds of a bearish reversal in the counter after remaining bullish for a few months. The neckline of the aforementioned chart pattern is marked from June 17 low at 134.27.

The greenback bulls seem unable to defend the 50-period Exponential Moving Average (EMA) at 135.24, which indicates a short-term downtrend.

Also, the Relative Strength Index (RSI) (14) has sensed barricades around 60.00, which signals that the yen bulls are barricading the asset to turn bullish.

A firmer drop below the H&S neckline marked from June 17 low at 134.27 will drag the asset towards June 15 low at 135.50, followed by June 17 low at 132.36.

Alternatively, the greenback bulls could regain their mojo back after violating Thursday’s high at 136.30. This will expose the asset to register fresh two-decade highs at 136.89, recorded in October 1998, followed by September 1998 highs at 139.91.

USD/JPY hourly chart