USD/JPY moves lower but the main support low of 106.57 is still holding

• USD/JPY is trading just under flat as stocks sold off for the most part on Thursday.
• There has been a recovery over the last few hours as the market found some support.

USD/JPY 1-hour chart

USD/JPY hit a low of 106.67 on Thursday but after a late buying spree in the US stock markets the pair is now testing 107.00. The break to the downside has been a long time coming after the price consolidated between 107.57 and 107.00 for most of the week. 

The main support on the chart now is holding at the wave low on the left at the 106.57 area. That is where the market found support after a long period of selling when the market moved from 109.85 to 106.57 between the 5th and 11th June. 

The technical indicators have now bounced back up after sinking lower. The Relative Strength Index indicator has made a bullish divergence pattern which shows some of the downside momentum has now been lost. The MACD histogram is now back in the green but the signal line remains below the mid-line. 

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