• The USD/JPY breaks a five-month-old trendline, eyeing the 200-day EMA around 134.99.
• Oscillators in bearish territory cement the downtrend, but overbought RSI might refrain USD/JPY short traders.
• USD/JPY: After reclaiming the 200-DMA, a fall toward 131.70 is on the cards.

The USD/JPY plunges below 136.00, extending its losses towards the 135.20s area, spurred by a risk-off impulse and manufacturing activity weakening in the United States (US), posing a recession risk. Therefore, USD/JPY sellers stepped in, below Wednesday's low, of 137.64, and sent the pair tumbling more than 250 pips. At the time of writing, the USD/JPY is trading at 135.34.

USD/JPY Price Analysis: Technical outlook

The USD/JPY shifted neutral-to-downward biased once it cleared the confluence of the 20, and 100-day EMA around 140.46/50. OF note, the 9-period Rate of Change (ROC) is gathering momentum, meaning sellers are in charge. Still, the Relative Strength Index (RSI) entered oversold conditions, meaning that the USD/JPY might consolidate around the 200-day Exponential Moving Average (EMA) at 134.99 before continuing to the downside.

Additionally, the USD/JPY tumbled below a 5-month-old upslope trendline draw from June lows, which exacerbated the downfall. To conclude, the USD/JPY is downward biased in the near term.

Hence, the USD/JPY first support would be 200-day EMA at 134.99. Break below will expose crucial psychological levels like the 134.00 and 133.00 figures, followed by the August 11 low at 131.73.

USD/JPY Key Technical Levels