USDJPY closed clearly below the symmetrical triangle on Monday on the four-hour chart, letting the bears take control.
The momentum indicators are currently backing the bearish mode as the RSI, the Stochastics, and the MACD are all decelerating, shifting the focus to the downside and particularly to the 106.90 key support level which provided a strong footing for the market this month.
In the negative scenario, should the 106.90 barrier prove easy to get through, re-activating the downward move from the 111.70 peak, the sell-off could extend towards the 50% Fibonacci of the upleg from 101.17 to 111.70, at 106.43. Beneath that obstacle, a steeper decline could take place until the 61.8% Fibonacci of 105.19.
In the event of an upside reversal, traders would like to see a decisive rally above the 107.60 barrier and the downward-sloping trendline to target the 107.94 resistance. If the latter fails to hold, more gains could follow until 108.45, a break of which could bring the 109.00-109.40 area next under the spotlight. Higher, the pair could eliminate fears of a down-trending market.
Summarizing, USDJPY is targeting the 106.90 support after closing below a symmetrical triangle. A break below that mark could put the downward pattern off 111.70 back into play, while a rally above 109.40 would brush away those fears.
