The USD/JPY has revealed a minor channel down pattern, which captures the rate’s decline in the aftermath of the Wednesday’s US CPI release surge. Future scenarios were based upon whether or not the rate continues to trade in the pattern’s borders.
In the case of the channel down pattern holding, the rate would gradually decline to the support of the 100 and 200-hour simple moving averages somewhere near 109.30. If these levels fail to hold, the pair could reach the 109.00 level.
On the other hand, a failure of the pattern could result in immediate drop to the mentioned simple moving averages and afterwards the 109.00 level.
