USD/JPY Price Analysis: Struggles near multi-month lows, below 107.00 mark

• USD/JPY comes under some fresh selling on Thursday and drops to five-month lows.
• The set-up seems tilted in favour of bears and support prospects for further decline.
• Bulls might eye October monthly swing lows, around mid-106.00s for some support.

The USD/JPY pair failed to capitalize on the previous day's attempted recovery move and came under some renewed selling pressure on Thursday amid a turnaround in the global risk sentiment.

The pair tumbled to fresh five-month lows – further below the 107.00 mark –and now seems to have found acceptance below the 61.8% Fibonacci level of the 104.85-112.23 strong positive move.

Given the recent breakdown below the very important 200-day SMA support near the 108.50-40 region, the set-up remains tilted in favour of bearish traders and support prospects for further weakness.

However, technical indicators on the daily chart have moved on the verge of breaking into the oversold territory and warrant some caution before positioning for the extension of the downward trend.

Hence, any subsequent fall seems more likely to find decent support and attract some decent buying near the October monthly swing lows, around mid-106.00s, which should help limit deeper losses.

USD/JPY daily chart

Technical levels to watch