On Friday, a lack of strong market movers put USD/JPY in a small trading range in the 111.20/40 area. The pair was stopped several times by the 20– and 55-hour SMAs, restraining a move above the 111.30 mark. In this session, however, the US Dollar passed the both SMAs to test the upper channel boundary. It is likely that the American currency breaks the given line and appreciates against the Yen, as the sideways momentum demonstrates mitigated downside risks. By and large, upside potential may be realised up to the monthly PP at 111.80. The downside limit may be provided by a support cluster formed by the 55– and 200-day SMAs apparent on the daily chart circa 111.00. Meanwhile, the US is to release m/m durable goods orders at 1230 GMT that may provide upside pressure on the pair.
