USD/JPY was trading sideways on Friday, being restricted by the monthly R1 from above and the 55– and 100-hour SMAs—from below. The pair made a false breakout of the latter early today but nevertheless it had returned above this cluster by Monday morning.
The Greenback has diminished its trading range within a two-week ascending channel. This suggests that the pair might breach its lower boundary at 110.20, likewise reinforced by the 61.90% Fibonacci retracement and the 200-hour SMA, and move lower down to a more senior channel and the weekly S1 circa 109.70.
Meanwhile, technical indicators remain bullish for today. Under this scenario, the aforementioned SMAs should guide the pair higher towards the weekly R1 at 111.30.
