• USD/JPY tumbled to a fresh three-month-low but rebounded towards 138.70s.
• A double bottom in the USD/JPY daily chart targets a rise to 145.00.
• USD/JPY Price Analysis: Break above 139.00 will exacerbate a rally to 140.00.

The USD/JPY is falling in the North American session, comfortable below the 139.00 figure after hitting a daily low of 137.49, reaching a fresh three-month low on a soft US Dollar (USD). At the time of writing,  the USD/JPY is trading at 138.80, below its opening price by 0.25%.

USD/JPY Price Analysis: Technical outlook

After testing during the last month, the 137.00 mark, the USD/JPY rebounded strongly, reclaiming the 138.00 figure, signaling that buyers stepped in. A possible formation of a “double bottom” chart pattern around 137.50/60 could open the door for a recovery, which could target the 50-day Exponential Moving Average (EMA) at 144.67, as the initial target, on its way to 147.00. Notably, the Relative Strength Index (RSI) remained unchanged as the USD/JPY price action dived toward a multi-month low. Hence, a positive divergence between RSI and price action could pave the way for further USD/JPY upside.

If that scenario continues, the USD/JPY first resistance would be the 140.00 mark. The break above will expose the 100-day EMA at 141.17, followed by the 142.00 figure, and the 50-day EMA at 144.67. In an alternate scenario, the USD/JPY first support would be 138.00. Once cleared, the next support would be the multi-month low around 137.49, ahead of an upslope trendline around 137.00.

USD/JPY Key Technical Levels