USD/JPY technical analysis: Oversold conditions helped bounce off weekly lows, bearish bias remains

• The USD/JPY pair has managed to recover around 15-20 pips from weekly lows and now seems to have stabilized around the 108.00 round figure mark.
• However, the intraday uptick struggled to make it through a resistance marked by 23.6% Fibo. level of the sharp decline led by Powell's dovish remarks.

A slight improvement in the global risk sentiment, which tends to undermine the Japanese Yen's relative safe-haven demand, turned out to be one of the key factors behind the attempted bounce amid extremely oversold conditions on the 1-hourly chart.

Given the overnight rejection near an important confluence resistance - comprising of 50-day SMA and 38.2% Fibo. level of the 112.40-106.78 recent downfall, the pair's inability to register any meaningful recovery suggests that the bearish bias might still be far from over.
 
A follow-through selling below 107.85-75 region will reinforce the negative outlook and turn the pair vulnerable to accelerate the slide further towards the 107.20-15 horizontal support en-route the 107.00 round figure mark and the 106.80 region (multi-month lows)

Thursday's release of the latest US Consumer inflation figures for June, coupled with the second day of Powell's testimony (though is unlikely to turn hawkish) have the potential to infuse fresh bout volatility and produce meaningful trading opportunities.

Meanwhile, any subsequent recovery might now confront some fresh supply near 38.2% Fibo. level – around the 108.30 region and is closely followed by mid-108.00s, above which the pair is likely to make a fresh attempt towards reclaiming the 109.00 handle.

USD/JPY 1-hourly chart