USD-JPY: Bears Take Control

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (fxtechstrategy.com) -- The USD-JPY pair is now on a second day of selloff following its failure to continue a recovery started from the 76.54 level.

It looks like USD-JPY could be building up downside momentum with the possibility of returning to 76.54 s support. If that level is taken out, further declines should shape up toward its 2011 low at 75.57. A violation there will aim at the 74.00 level ahead of the 73.00 level. Its daily RSI is bearish and pointing lower supporting this view.

Alternatively, in order for the pair to restart its bullish strength, it will have to break and hold above the 78.20/27 levels. This will open further upside toward the October high of 79.49, followed by the July 8 high of 81.47 and subsequently the May 24 high of 82.21.

All in all, USDJPY is biased to the downside long term which is consistent with its present bear threats.

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