USD/JPY technical analysis: Off session lows but not out of the woods yet

• USD/JPY has recovered from session lows despite risk aversion in the financial markets. 
• The pair has created a bear flag – a bearish continuation pattern – on the hourly chart.

USD/JPY is currently trading at 109.39, having hit a low of 109.15 earlier today. 

The pair has recovered from session lows despite the US 10-year treasury yield hitting a fresh 20-month low of 2.24% a few minutes before press time and signs of risk aversion in the equity markets. 

While the recovery from session lows is a notable development, the pair is not out of the woods yet as suggested by the bear flag seen in the hourly line chart. 

A break below the lower end of the flag, currently at 109.20, would confirm a flag breakdown. That would open the doors to 108.13 (target as per the measured move method). 

The bear flag pattern would be invalidated if the pair rises above 109.54. 

Hourly chart

Trend: Bearish below 109.20

Pivot points