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USDJPY: Searching for a bottom

Since the start of the year the currency lost more than 16.5% and last week was no different with a drop of more than 1.0% nevertheless continues in a bearish phase since the beginning of January 2016.

Last week the USDJPY fell with a wide range and closed near the low of the week, in addition managed to close below the previous week low, suggesting a strong bearish momentum. The pair may find some support at 98.89 current 2016 low and can create a double bottom.

Stochastic is showing an oversold market but is still displaying bearish momentum.

Expecting an upward move to a weekly resistance at 102.35 on a bounce of the 2016 low at 98.89 (scenario 1) however a break below the 2016 low at 98.89 may trigger a sell-off down to a Fibonacci extension at 95.15 (scenario 2).