• USD/JPY remains pressured around three-week low, fades corrective pullback of late.
• Clear downside break of monthly trend line, downbeat RSI favor sellers.
• 50-DMA lures sellers, bulls stay cautious below 138.40.

USD/JPY bears keep reins around 135.30 as they cheer the downside break of an ascending trend line from June 23 heading into Thursday’s Asian session.

In doing so, the yen pair also justifies the previous day’s U-turn from a fortnight-old horizontal resistance, around 137.40. Furthermore, downward sloping RSI (14), not oversold, also keeps USD/JPY bears hopeful.

That said, the quote presently drops towards the 38.2% Fibonacci retracement of the May-July upside, near 134.35.

Following that, the 50-DMA level near 134.15 could challenge the USD/JPY bears before directing them to the mid-June swing low of 131.50.

Alternatively, the support-turned-resistance line, at 135.90 by the press time, precedes the 136.00 threshold to restrict short-term USD/JPY recovery.

Even if the pair rises past 136.00, a horizontal area comprising multiple levels marked since July 11 and a downward sloping resistance line from July 14, respectively near 137.40 and 138.40, will be tough nuts to crack for the pair buyers before gaining control.

Overall, USD/JPY is on the way to 134.15 until the quote stays below 138.40.

USD/JPY: Daily chart

Trend: Further weakness expected