USD/JPY Price Analysis: Testing 38.2% Fibo support, downside bias remains intact

• USD/JPY clings to 38.2% Fibo on the 1D chart, eyes 107.50.
• Selling pressure remains unabated amid persistent weakness in the DXY.
• Focus shifts to US Durable Goods Orders for fresh impetus.

USD/JPY is once again attempting recovery above the 107.50 level, although the bears continue to target the seven-week troughs reached last Friday at 107.47, as the US dollar extends its bearish momentum into a fresh week.

The spot shrugs off the renewed uptick in the US Treasury yields, as rising covid cases in Japan underpin the safe-haven yen.

At the time of writing, USD/JPY drops 0.10% on the day, trading at 107.82, with further downside still in play.

From a near-term technical perspective, the minor rebound in the spot challenges the critical 107.80 support, which is 38.2% Fibonacci Retracement level (Fibo) of the rally from early January lows at 102.60 to March 31 highs of 110.97.  

A daily closing below that level is needed to revive the bearish momentum. The immediate downside target is seen at the multi-week lows of 107.47.

The next relevant support awaits at 106.80, the 50% Fibo of the same rally.

The 14-day Relative Strength Index (RSI) points south towards the oversold territory, currently at 35.80, suggesting that there is more room to the downside.  

USD/JPY daily chart

However, if the bears face exhaustion, a temporary pullback towards the 108.00 level cannot be ruled out.

Buyers would then seek a test of the 50-daily moving average (DMA) at 108.31.   

Further north, the 23.6% Fibo level at 109.00 could act as a stronger barrier for the bullish traders.

USD/JPY additional levels to watch