USDJPY is in a neutral phase in the near term and price action has been pivoting around the key 110.00 level in the past week.
Looking at the bigger picture, USDJPY is holding below the base of the Ichimoku cloud, giving a bearish setup. Prices are also capped under the tenkan-sen line and below the 200-day moving average. Meanwhile, momentum studies are also bearish, since RSI is below 50 and MACD is below zero.
A sustained push above the key 112.00 level and above the cloud would indicate a weakening in the current bearish bias. This would be an important resistance level that would need to be surpassed to open the way towards 114.36 (May 10 high), and then 115.50 (March 10 high) and 118.65 (December 15 high). From here, there would be a resumption of the uptrend that took place from October to December 2016.
If prices continue lower from current levels, the April 17 low at 108.12 would be important support. However, a deeper decline from here would confirm that a top is in place at 114.36, and the downtrend from 118.65 would be strengthened. The next target for support comes in at 105.52 (October 28 high).
The overall outlook remains bearish, due to the lower tops and lower lows that are in place. Should the 50-day moving average cross below the 200-day moving average in coming days, this would give a bearish signal and strengthen the downside momentum.