Reversal pattern is forming on daily chart
The pair eases on Wednesday after previous day’s action ended in Doji candle with long upper shadow and generated an initial signal that steep uptrend from 107.65 (8 Jan spike low) is losing traction and corrective pullback or reversal might follow after false break above psychological 110 barrier.
Significant drop in USDJPY longs (from $2.9bln last to 1.4bln) adds to negative signals.
Daily momentum/RSI and overbought stochastic turned south and support scenario.
Former tops at 109.70 zone mark initial support and currently under pressure, with break here to open key levels at 109.23 (Fibo 38.2% of 107.65/110.21 / 20DMA) and 109.03 (daily cloud top) which need to contain corrective dips and keep bulls in play for fresh push higher.
Res: 110.01; 110.21; 110.52; 110.67
Sup: 109.70; 109.60; 109.23; 109.03