USD/JPY traded higher on Tuesday, but hit resistance at 109.45 (R1) and then it retreated somewhat. Given that once again the recovery from near 107.65 (S2) remained limited below the round figure of 110.00 (R2), I would expect the forthcoming wave to be to the downside. A decisive move below 108.80 (S1) is likely to confirm that and perhaps open the way for another test near the 107.65 (S2) area. Our short-term momentum studies support the case as well. The RSI has topped within its bullish territory and now looks able to fall back below 50, while the MACD has topped slightly above zero and now appears ready to turn negative. As for the bigger picture, I still believe that the longer-term trend is to the downside. Nevertheless, a break below 107.65 (S2) is needed to confirm a forthcoming lower low on the daily chart and perhaps signal the continuation of the longer-term downtrend.