USD/JPY Price Analysis: 106.75 is the level to beat for sellers

• USD/JPY's pullback from the monthly high looks to have stalled at 106.75. 
• Acceptance under that key support could invite stronger sell pressure. 

USD/JPY's sell-off from the 2.5-month high of 109.58 reached on June 5 could pick up the pace if the newfound support at 106.75 is breached. 

The sellers have consistently failed to establish a strong foothold below that level in the last seven trading days. As a result, a violation there will likely invite stronger chart-driven selling, yielding a deeper decline to 105.99 (May 6 low). 

Alternatively, a move above 107.64 (June 16 high) would invalidate the lower high setup on the daily chart and open the doors for a re-test of 109.58. 

Key indicators are reporting a lack of clear directional bias. For instance, the 14-day relative strength index (RSI) is flatlined below 50.00 and so is the weekly RSI. 

At press time, the pair is trading largely unchanged on the day at 106.88, having put in a session low of 106.74 early Monday. 

Hourly chart

Trend: Neutral

Technical levels