USD/JPY Price Analysis: Rejection at 50-day SMA proves costly

• USD/JPY faces rejection at the 50-day average resistance.
• The hourly chart shows a contracting triangle breakdown. 

The USD/JPY bulls failed to cut through the 50-day simple moving average (SMA) at 107.55 early Monday and the pair is now trading in the red near 107.20. 

The reversal lower from the key SMA hurdle has neutralized the immediate positive view put forward by Friday's bullish outside day candlestick. 

Friday's low of 106.58 may come into play as the bearish or below-50 reading on the 14-day relative strength index (RSI) is backed by a symmetrical triangle breakdown on the hourly chart. In addition, the hourly chart RSI has breached the ascending trendline, signaling an end of the bounce from 106.58. 

The outlook would turn bullish if the pair closes Monday above the 50-day SMA of 107.55. 

Daily chart

Hourly chart

Trend: Bearish

Technical levels