USD/JPY is trading over 1.0% lower on Wednesday as it extends its bearish trend reversal after peaking at the July 10 highs and then rolling over. 

After the recent bout of weakness, it could now be argued that both the short and probably medium-term trends have turned bearish. Given the old adage that “the trend is your friend” the odds favor a continuation lower over those time frames. 

USD/JPY Daily Chart 

(Click on image to enlarge)  

USD/JPY has reached its conservative downside target at 154.90, which is the 61.8% Fibonacci extension of the down move prior to the major trendline break, extrapolated lower. It has also now almost reached 153.21, the 100% extrapolation of the same. 

It is possible prices could continue falling to the next obvious target at 151.84 and a key support level (October 2021 high). 

The Relative Strength Index (RSI) is just about in oversold territory on an intraday basis. If the day ends with the RSI below 30 and, therefore, oversold there will be an increased risk of a pullback or consolidation developing and delaying the pair’s continued sell-off. 

The long-term trend remains bullish with a break below 151.84 required to bring that into doubt.

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