USD/JPY technical analysis: Attempted recovery runs the risk of fizzling out rather quickly

• The USD/JPY pair stalled its recent bearish slide and managed to find decent support near the 107.00 handle during the Asian session on Friday.
• The attempted rebound from multi-month lows lifted the pair to daily tops, around mid-107.55-60 region, albeit lacked any strong follow-through.

Given the post-FOMC slump of over 150-pips, Friday’s intraday uptick might still be categorized as a corrective bounce from extreme oversold conditions and runs the risk of fizzling out rather quickly.

Meanwhile, the overnight bearish break below 23.6% Fibo. level of the 104.75-112.40 up-move from the early-January flash crash lows support prospects for an extension of the near-term depreciating move.

Moreover, the descending trend-channel formation on the daily chart, extending from yearly tops, add credence to the bearish set-up and warrant caution for traders positioning for any meaningful recovery.

Hence, any subsequent up-move back towards the 108.00 handle, coinciding with the recent trading range breakdown point, might be seen as an opportunity to initiate some fresh bearish positions.

USD/JPY daily chart