• USD/JPY extends losses below 61.8% Fibonacci retracement of May-June upside.
• The monthly low can offer an intermediate halt during the fall towards 106.00.
• 200-bar SMA adds to the resistances for the pair.

USD/JPY drops to 106.80, down 0.18% on a day, while heading into the European open on Thursday. The pair extends its pullback from the key Fibonacci retracement levels to portray a rounding top bearish formation on the four-hour chart.

As a result, the quote is likely to remain weak and decline further towards revisiting the monthly low near 106.57 during the extra fall. However, May month’s bottom surrounding 106.00 could quickly lure bears afterward.

Alternatively, 200-bar SMA near the 61.8% Fibonacci retracement level strengthens the 107.45/55 resistance area. However, oversold RSI conditions can offer the pair’s pullback towards 107.20.

If at all the USD/JPY prices rally beyond 107.55, 108.00 and May 19 top close to 108.10 could return to the charts.

USD/JPY four-hour chart

Trend: Bearish