Blue lines- Fibonacci retracement levels
Red lines- Bearish channel
USDJPY is trading around 131.53. Price is making another attempt to break out of the short-term bearish channel it is in since beginning of March. Price has so far retraced 78.6% of the entire rise. USDJPY is turning upwards but technically trend remains bearish as price has not broken above the latest lower high of 133.02. In order to call a bottom, we need price to break above 133. Support is found at recent low of 129.66. Failure to hold above this low will open the way for a bigger decline towards 127.50 and lower. The chances for a bounce higher towards 133 have increased. A pull back to form a higher low would be ideal for bulls.
In the daily chart we see a reversal candlestick pattern by Friday's candlestick. The long lower tail suggests a bullish hammer which if followed by a bullish candle it usually suggests a reversal under way. So far Friday's candlestick and today's candlestick point towards the reversal scenario.