Yesterday, the USD/JPY currency pair tested the upper boundary of the long-term descending channel at 109.70. During Thursday morning, the pair continued to test the given channel.
From a theoretical point of view, it is likely that a reversal south could occur in the nearest future. In this case the exchange rate could target the support level formed by the weekly PP and the 200-hour SMA at 109.17.
However, note that the currency pair is supported by the 55– and 100-hour SMAs. Thus, if the given channel does not hold, some upside potential could prevail in the market, and the pair could target the weekly R1 at 109.91.
