Two days ago we warned traders that USDJPY is providing rejection sign and the chances of a pull back had increased. Price reached resistance and bounce target area of 135 and was under selling pressures. The rejection two days ago has now unfolded into a sharp decline with price losing nearly 300 pips in two days. Recent price action has made us reach some important conclusions. Bears are still here and strong. The rejection at 135.40 area could prove to be an important lower high. This is now important resistance that bulls need to overcome. The decline from 139 is not over yet. This was just a pause. This scenario will remain our primary as long as price is below recent high of 135.58. USDJPY is vulnerable to breaking to new lows towards 130 and lower.
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