- A broad-based USD weakness prompted some aggressive selling around USD/JPY.
- The pair dived below the 107.00-106.90 support and dived to fresh monthly lows.
- The technical set-up supports prospects for a further near-term depreciating move.
The USD/JPY pair came under some heavy bearish pressure on Tuesday and nosedived to fresh monthly lows, around mid-106.00s amid a broad-based USD weakness.
The intraday fall took along some trading stops near the 106.95-90 region, which was seen as a key triggers for bears and prompted some aggressive selling.
However, extremely oversold conditions on the 1-hourly chart held traders from placing fresh bearish bets and might help limit deeper losses, at least for now.
Meanwhile, oscillators on the daily chart maintained their bearish bias and are still far from being in the oversold territory, suggesting further weakness for the pair.
Hence, any attempted recovery might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly near the 106.90-107.00 support breakpoint.
The pair now seems all set to extend last week’s rejection slide from the 108.00-108.10 supply zone and head towards testing intermediate support near the 106.30 region.
The downward trajectory could further get extended towards the 106.00 round-figure mark before the pair eventually drops to its next major support near the 105.80-75 region.
USD/JPY 1-hourly chart
Techical levels to watch