USDJPY is in a short-term bearish trend. Price has recently broken out of an upward sloping channel and has started forming lower lows and lower highs in the 4 hour chart. Price has retraced 23.6% of the upward move so far and chances continue to favor a deeper pull back.

Red line- resistance

Black lines- Fibonacci retracements

USDJPY is making lower lows and lower highs after breaking out of the bullish channel. Price is below the short-term resistance trend line and as long as this is the case, we expect price to move even lower at least towards the 38% Fibonacci retracement. So far price has retraced only 23.6% of the entire upward move. This is a very shallow pull back but price has tested it so far twice and both times support did not break. Bears need to break below the short-term support at 127.10. Resistance by the red trend line is at 128.47. Bulls need to break above this resistance level in order to hope for a continuation of the up trend to new higher highs above 131.40.