After failing to break through range resistance at 109.73 (109.62 based on closing price) the rate has collapsed and is now testing range support at 108.24 (108. 40 based on closing price). There is some additional support at 107.88 (108.02 based on close).
A close below 108. 40 is and 107.88 is likely to be tested. A close below 108.02 setups up a longer-term decline with an initial target just above 106.50, but with the potential for the pair to fall lower based on the larger patterns in play.
The pair has been making lower swing highs since late 2018. This large range occurs near descending trendline resistance. A close below 108.02 sets up a longer-term decline into major support between 105 and 104.50. The price has spent very little time in that area over the last few years, so 105 to 104.50 is an area to once again watch for sharp reversals back to the upside. If the price doesn't reverse sharply off that level, as it has in the past, that is a warning sign that the buying pressure in that area has been reduced.
There is still a case for the USD/JPY , but it must climb back 109.73 (close above 109.62) in order to signal a rally above the current range. That would also break the clearly visible descending trendline which could draw in additional buying interest from technical traders.
If that upside breakout occurs, the initial target is 112, but over the longer-term, the price could continue to move up into the larger range resistance between 114 and 114.50.
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