USDJPY shifted to a more bearish bias after falling below the 50-day moving average. The market is also trading below the 61.8% Fibonacci retracement level of the upleg from 108.80 to 114.49 (June 14 to July 11 rise) – this corresponds to the 110.96 level.
Risk remains to the downside in the short-term as the RSI is below 50 and sloping downwards. Meanwhile, the 50-day MA crossed below the 200-day MA on July 18, giving a bearish signal.
The immediate target to the downside is at the psychological level of 110.00. A break below this support level would target the June 14 low of 108.80, resulting in a complete reversal of the uptrend that took place from this 108.80 low to the 114.49 high. Such a move would open the way to the April 17 low of 108.12. From here, the bearish bias would strengthen.
To the upside, the previous support-turned-resistance and Fibonacci level at 110.96 would act as a barrier to any bounces higher. A break above the 50% Fibonacci and 50-day MA at 111.63 would weaken the bearish bias and target 112.30 and 113.13 before reaching the 114.49 high.
The short-term bearish phase remains strong below the 50-day and 200-day MA. The medium-term picture remains neutral unless there is a breakout above 115.00 or below 108.00.
