USD/JPY 4H Chart: Rectangle

Technically USD/JPY was in a very good position to commence a depreciation. Rectangle pattern was violated after the Yen appreciated above the 110.64 mark against the Dollar, which is the monthly S1 that guarded the pattern lower horizontal trend-line. At the moment the pair is trying to erode the second monthly support at about 108.70. In any case, the outlook is strongly bearish and the only major support should be met at 105.20, which is the October 2014 low. Another one is the 2014 low at 100.74. Moreover, traders of the SWFX market are not prepared to get rid of long positions (73%), meaning USD/JPY should potentially have more scope for a deeper selloff in the weeks and months to come.