Unstoppable decline, 105.00 is now the line in the sand. The USD/JPY plummeted to a fresh multi-month low, reaching 108.01 in the Asian session, its lowest since October 2014. The pair pared losses during the European morning, but the bounce was quite shallow, indicating that selling interest is still strong. There was no clear catalyst behind this latest decline, except an acceleration of the bearish momentum, after the pair broke below the 110.00 figure earlier this week. Technically, the downward potential remains intact, as in the 1 hour chart, the technical indicators have turned back south after a limited upward corrective movement, all within extreme oversold territory. In the 4 hours chart, the technical indicators have lost their upward strength, but remain in extreme levels, with the RSI indicator currently around 17. The pair has little room to recovered, as the BOJ has set a new line in the sand around 105.00, a level that the market will likely test during the upcoming days.
Support levels: 108.00 107.65 107.30
Resistance levels: 108.75 109.10 106.50