Yesterday, the USD/JPY currency pair raised to the upper boundary of the long-term descending channel at 109.70. During Tuesday morning, the pair was testing the given line.
From a theoretical point of view, it is likely that a reversal south could occur in the nearest future. In this case the exchange rate could decline to the support cluster formed by the 100– and 200-hour SMAs, as well the weekly and monthly PPs in the 108.94/109.17 range.
However, note that the currency pair is supported by the 55-hour moving average, currently located at 109.50. Thus, if the given channel does not hold, some upside potential could prevail in the market, as the pair could target the weekly R1 at 109.91.
