- USD / JPY reduces all the profit of the previous day on Thursday.
- Further declines are expected for the pair if the price breaks through the shoulder, head, shoulder formation.
- Momentum Oscillators advise caution for any aggressive directional bets.
USD / JPY remains under pressure in European trading hours. The pair is near the daily support level around 109.70.
At the time of writing, USD / JPY is trading at 109.77, losing 0.14% daily.
USD / JPY Daily Chart
On the daily chart, the USD / JPY pair has formed a Shoulder-Head-Shoulder figure, which is a bearish reversal technical pattern.
If USD / JPY breaks the neck line of the mentioned technical pattern, it would accelerate the sell towards the horizontal support level 109.50.
The Moving Average Convergence Divergence (MACD) indicator trades just below the trend line with a neutral stance. Any decline in the MACD would put the July 20 low at 109.32 back into action.
Next, the USD / JPY bears would scramble to capture the horizontal support level 109.00.
Alternatively, if price manages to hold the neckline at the head-and-shoulders figure, it could crawl back to the 110.00 horizontal resistance level, followed by the 110.40 horizontal resistance.
The USD / JPY pair will make the next move towards the July 26 high in the vicinity of the 110.60 zone.
Technical Levels
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