On April 6th in our analysis we warned USDJPY bulls that as price was breaking out of the bullish channel, it was time for a correction. At that time we were expecting the correction to push price lower towards 108.35-109 area. Price has reached this level and even pushed a bit lower.
Red line - trend line support
Green lines - Fibonacci levels
Red rectangle - possible reversal area
USDJPY is approaching the first important Fibonacci retracement (38% level). Price is also approaching the red upward sloping support trend line. I believe there are increased chances of seeing at least a short-term bounce in USDJPY from 107.60-108 area. This is important support area and I expect at least a bounce towards 109. If the red trend line support is broken we expect price to continue lower towards the next major Fibonacci level (61.8%).