Yesterday, the USD/JPY currency pair reversed south from the upper boundary of the long-term descending channel. During Wednesday morning, the pair was testing the support formed by the 100-hour SMA at 109.41.
From a theoretical point of view, it is likely that some downside potential could continue to prevail in the market. In this case the exchange rate could target the support cluster formed by the 200-hour SMA, as well the weekly and monthly PPs in the 109.03/109.17 range.
However, if the given support holds, it is likely that the currency pair could re-test the upper channel line. If the given trend holds, the US Dollar could consolidate against the Japanese Yen in the short run.
