Buyers come in ahead of the midpoint target
The USDJPY on the daily chart has been developing a floor in April between 106.91 and 106.988 (see red numbered circles on the daily chart below). That level was tested yesterday and bounced. Today, the price action fell below that area and continued lower. The low price for the day has reached 106.55.
On the downside, the next key targets come in against the swing low going back to October 2019 at 106.477. Just below that level is the 50% retracement of the sharp move up from the March low to the March high. That level comes in at 106.440.
The low today 106.55 sniffed those levels (early buyers may be leaning against the midpoint level). A move below would be more bearish technically. Stay above however, gives buyers hope that the break of the April floor was an extreme. It will take a move back above the 106.91 level, him to give the dip buyers more confidence.
Drilling to the hourly chart below, the high price last week stalled at a ceiling area at the 108.03-07 area. Yesterday, the price high stalled ahead of the 100 and 200 hour MAs (blue and green lines in the chart below). Today, the floor area was broken at 106.91-988.
So three bearish technical moves has kept the sellers in control.
With the bears/sellers in control, the 106.487 is a lower channel trend line on the hourly chart. There could be dip/profit taking buying against the area (it is also near that 50% on the daily chart at 106.44). However, a break should solicit more selling.
Key risk is the floor broken today at 106.91-988. Stay below, keeps the sellers in control. Move above and the waters become more muddy for the pair.