USD/JPY (a 4-hour chart)
The China stock market volatility is reflected in the Asia, Europe and the US equity markets which is a negative factor for the pair. Investors do not have "risk appetite" and against this background, we see the carry trade transactions closure and demand for the Japanese yen as a funding currency.
After the support level of 123.50 breakthrough there was another strong support level of 122.40 breakthrough.
The price is finding the first support at 121.60, the next one is at 120.40. The price is finding the first resistance at 122.40, the next one is at 123.50.
There is a confirmed and a strong sell signal. The price is under the Cloud and it is under the Chinkou Span. The Tenkan-sen and the Kijun-sen show a downward movement. The downward movement will be until the price is under the Cloud.
The MACD indicator is in a negative territory. The price is decreasing.
The potential decrease targets are two levels of support: 121.60, 120.40.