USD/JPY Price Analysis: Bears stay on the way to 127.00

• USD/JPY remains on the back foot around monthly low, renews daily bottom of late.
• Sustained trading below 200-SMA, absence of oversold RSI keeps sellers hopeful.
• Monthly horizontal support gains the seller’s attention, fortnight-old descending trend line adds to the upside filters.

USD/JPY takes offers to refresh intraday low around 127.50 during Monday’s Asian session. In doing so, the yen pair justifies Friday’s U-turn from the 200-SMA while fading the previous bounce off the one-month-old horizontal support.

In addition to the failure to cross the 200-SMA, downbeat RSI (14), not oversold, also underpins the bearish bias targeting the 127.00-126.95 support zone.

However, 50% and 61.8% Fibonacci retracements of the USD/JPY pair’s run-up during the late March to early May period, respectively around 126.30 and 125.10, could challenge the pair sellers afterward.

On the contrary, a clear upside break of the 200-SMA, around 128.25 by the press time, won’t recall the bulls as a downward sloping trend line from May 09, close to 128.95 at the latest, will test the USD/JPY run-up.

Also acting as an upside filter is the 129.00 threshold, a break of which could propel the quote towards the monthly peak of 131.34.

Overall, USD/JPY has further downside room but the bears have a long road to travel to retake control.

USD/JPY: Four-hour chart

Trend: Further downside expected