USD/JPY Price Analysis: Reverses early gains despite bull RSI divergence

• USD/JPY looks to extend the two-day losing streak. 
• Bear cross on the hourly chart favors deeper declines.

USD/JPY is trading at 107.70 at press time, having printed a high of 107.87 during the early Asian trading hours. 

The pair is struggling to carve out a notable bounce despite the bullish divergence of the hourly chart relative strength index (RSI) - a sign the sentiment is quite bearish. 

The pair has declined by 200 pips in the last two trading days and could cut through the support of the trendline drawn from May 7 and May 29 lows, currently at 107.58. That could bring in stronger selling pressure, leading to a deeper decline to levels under 107.00. 

Supporting the case for a deeper drop is the bearish crossover of the 50- and 200-hour simple moving averages (SMA). 

The bearish outlook would be invalidated if the pair rises above the 200-hour SMA at 108.39. 

Hourly chart

Trend: Bearish

Technical levels