USD/JPY: more downside to come, targetting below recent monthly lows

USD/JPY is currently on the offer albeit not by much. The yen has been making tracks across the board since the sell-off above 102.60 and made lows just below the 101 handle at 100.95 overnight in late London trade.

The greenback was on the back foot and the DXY fell by around 0.5% ad enabled the Yen to continue on its northerly trajectory. Data wise, analysts at Westpac noted"US JOLTS job openings rose from 5514 to 5624 in June (vs 5675 expected). There’s little new information in this report but it does corroborate the view the labour market is healthy. The government budget deficit narrowed in July, from -$149bn to -$113bn (-$115bn expected)." The next major catalyst will be US retail sales later on in the week expected to drop yet again further adding to the case for more downside in USD/JPY before the week is out.

USD/JPY levels

What price levels and patterns have to be considered? Spot is presently trading at 101.08, and next resistance can be seen at 101.22 (Weekly Low), 101.29 (Daily Open), 101.32 (Daily Classic S2), 101.32 (Daily High) and 101.33 (Hourly 20 EMA). Support below can be found at 101.02 (Daily Low), 100.97 (Yesterday's Low), 100.90 (Monthly Low), 100.85 (Daily Classic S3) and 100.71 (Weekly Classic S1). Regarding candlestick formations, we can see Dark Cloud Cover formation on the 1-hour.