USD/JPY Price Analysis: Bears are firmer on rising channel breakdown, 135.00 eyed

• Bulls' failure in establishment above 200-EMA resulted in a bearish reversal.
• A rising channel breakdown along with rejection has dragged the asset significantly lower.
• The RSI (14) has slipped below 40.00, which adds to the downside filters.

The USD/JPY pair is falling like a house of cards after surrendering the crucial support of 136.40 in the early Tokyo session. The pair has eased more than 0.2% in the initial session and is likely to display more losses ahead as the US dollar index (DXY) is heavily dumped by the market participants.

A downside break of the rising channel chart pattern on an hourly scale has weakened the greenback bulls. The upper and lower portion of the above-mentioned chart pattern is plotted from July 25 high and low at 136.79 and 135.89 respectively. Also, a rejection of the breakdown test has bolstered the yen bulls.

The downside move in the asset was initiated after the pair failed to sustain above the 200-period Exponential Moving Average (EMA) at 137.18, which created a base for a bearish reversal.

Meanwhile, the Relative Strength Index (RSI) (14) has slipped below 40.00, which has infused fresh blood into the yen bulls.

A minor recovery towards the 5-period EMA at 136.45 will be a bargain sell for the market participants. This will drag the asset towards July 25 low at 135.89, followed by the psychological support at 135.00.

On the flip side, the greenback bulls could wonder if the asset oversteps July 25 high at 136.79. An occurrence of the same will send the asset towards the 200-EMA at 137.12. A breach of the 200-EMA will push the asset towards Wednesday’s high at 137.46.

USD/JPY hourly chart