Yesterday, the USD/JPY currency pair reached the upper boundary of the falling wedge pattern at 107.44. During Tuesday morning, the pair reversed south from the line.
From a theoretical point of view, it is likely that some downside potential could prevail in the market, as the exchange rate should target the lower pattern line located circa 106.50.
It is unlikely that some upside potential could prevail in the market, as the currency pair is pressured by the 55– and 100-hour SMAs, located circa 107.00. Also, it is unlikely that the pair could drop lower than the monthly S1 at 106.40.
