USD/JPY Price Analysis: Bearish pressure eases, but another test of 106.00 seems likely

• The yen soared against the US dollar but it failed to break key support and rebounded.
• Bearish pressure prevail in USD/JPY, but the negative momentum eased.

The USD/JPY pair tumbled from 107.20 to 106.06, hitting the lowest level since early May. After losing more than a hundred pips, the US dollar found some support as the decline become substantial. The bias still points to the downside, but the pressure eased after finding support above 106.00.

The bounce from the low lost momentum around 106.50, showing some consolidation between 106.80 and 106.25, seems likely over the next hours.

If USD/JPY rises above 106.70, it could gain further strength while above 107.00/10 (20-SMA in 4-hour chart) could suggest that the dollar formed an interim base. While it remains below 107.00, another test of 106.00/10 should not be ruled out. A break lower would target 105.50, leaving the pair vulnerable to more losses.

USD/JPY 4-hour chart