USD/JPY Price Analysis: Reverses lower from 109.58, focus on weekly close

• USD/JPY has established another low high on the hourly chart at 109.58. 
•  A close below the 100-week MA on Friday would confirm a bearish reversal. 

The buying interest in the Japanese yen gathered traction in the last hour or so, pushing USD/JPY lower to 109.46 from the session high of 109.58. 

With the reversal lower from 109.58, the pair has established another lower high on the hourly chart. So, a re-test of Thursday's low of 109.27 cannot be ruled out.

Weekly close pivotal

The pair is currently trading below the 100-week average at 109.66. The bulls failed to secure a weekly close above that average at least six times during the two months to the second week of January. 

The pair scaled the 100-week average last week, confirming a bullish breakout or a continuation of the rally from the low of 104.45 seen in August. 

So far, however, the follow-through has been dismal, as evidenced by the pair's drop below the key average. 

If the pair closes below the 100-week average of 109.66 on Friday, the bullish breakout would fail. A failed breakout would imply bearish reversal and open the doors for a deeper drop to 107.65 (January low). 

Weekly chart

Trend: Bearish below 100-week MA

Technical levels