The USD/JPY has dropped below the 107.00 level. On Tuesday morning, the drop was stopped by the lower trend line of a large scale descending channel pattern at 106.80.
The currency pair was expected to trade sideways until the resistance of the 55-hour simple moving average declines. The 55-hour SMA, was the technical level, which previously pushed the rate down and was also the cause for the Monday’s sharp drop.
On the other hand, the rate could even surge above the 107.00 level and approach the SMA on its own, without trading sideways and waiting for the moving average to move down.
