• USD/JPY justifies weekly support break to print two-day downtrend.
• Bears approach eight-month-old horizontal support area before poking the latest multi-month low.
• Descending trend line from October, 21-DMA restricts immediate upside.

USD/JPY drops for the second consecutive day after reversing from a two-month-old descending resistance line, down 0.35% intraday near 132.60 during early Friday.

In doing so, the Yen pair also justifies the previous day’s downside break of a one-week-old ascending support line, now resistance around 133.90.

That said, the quote is declining towards a horizontal support zone comprising multiple levels marked since April, around 131.50-30. However, the pair’s further declines past 131.30 appear limited due to the sluggish MACD signals.

In a case where the USD/JPY breaks the 131.30 support the recent bottom surrounding 130.55, also the lowest level in four months, will be in focus.

Also likely to challenge the USD/JPY bears is the August month’s low near 130.40 and the 130.00 round figure, a break of which could quickly drag the quote towards May’s low near 126.35.

Alternatively, the immediate support-turned-resistance line, around 133.90, guards short-term USD/JPY recovery.

Following that, a downward-sloping resistance line from October 21 and the 21-DMA could challenge the bulls around 134.20 and 135.00 respectively.

It’s worth noting, however, that a convergence of the 200-DMA and the 61.8% Fibonacci retracement level of the pair’s May-October upside, near 136.25, appears a tough nut to crack for the USD/JPY buyers.

USD/JPY: Daily chart

Trend: Further downside expected