USD/JPY technical analysis: On the back foot below 21-DMA, 106.77/80

• USD/JPY remains below 21-DMA, near-term key horizontal resistance.
• Recent low, nine-week-old support-line limit immediate downside.

Not only multiple failures to cross a two-month-old horizontal area but sustained trading below 21-day simple moving average (DMA) also portrays the USD/JPY pair’s weakness as it makes the rounds to 105.75 during early Tuesday.

While 105.00 can act as immediate support, latest bottom and a nine-week-old falling trend-line, near 104.50/45, restricts pair’s further declines.

In a case where prices keep trading southwards past-104.45, bears might not hesitate to target late-2016 lows surrounding 102.50.

Alternatively, 21-DMA level of 106.45 and 106.77/80 confine the pair’s near-term advances, a break of which can propel prices to July month low of 107.21 and then to 38.2% Fibonacci retracement of a downpour since late-April, around 107.50.

USD/JPY daily chart

Trend: Bearish