USD/JPY technical analysis: Risks skewed to the downside

• USD/JPY is looking south, having created candles with long upper wicks. 
• The pair is still trapped in a bearish channel. 

USD/JPY risks falling back toward 108.00 today, having charted back-to-back daily candles with long upper shadows. 

A candle with a long upper shadow is considered a sign of buyer exhaustion. 

A break below 108.31 (Monday’s low) today would validate the buyer exhaustion near 108.80 signaled by the daily candles with long upper shadows and could yield a drop to fresh 2019 lows below 107.81. 

The outlook would turn bullish if and when the spot exits the falling channel with a move above the upper edge of the bearish channel, currently at 109.32. The pair is currently trading at 108.45, representing minor gains on the day.

Daily chart

Trend: Bearish

Pivot levels