Yesterday, the USD/JPY currency pair dropped to the lower boundary of the short-term ascending channel at 105.80. During Tuesday morning, the pair was testing the resistance level—the Fibo 23.60% at 107.02.
Note that the exchange rate is supported by the 55-hour SMA near 106.50. Thus, some upside potential could continue to prevail in the market. A possible upside target is the Fibo 38.20% at 108.44.
However, if the given resistance holds, a breakout south from the given channel could occur. In this case the rate would have to surpass the support cluster formed by the 100– and 200-hour SMAs, as well the weekly PP in the 105.15/105.95 area.
