As the announcement of the Japanese Prime Minister Shinzo Abe resigning was made, the USD/JPY started to trade with high volatility. However, it has continued to respect technical levels. Namely, the support of a channel up pattern held and caused a surge.
On Friday, the rate had tested the resistance of a 38.20% Fibonacci retracement level at 106.86 and failed to pass it. The event was followed by a decline to the 106.00 level.
In the case of the decline continuing, the pair would look for support in the 200-hour SMA at 105.95 and the weekly simple pivot point at 108.88 before reaching for the lower trend line of the mentioned channel up pattern.
Meanwhile, note that the recent highly volatile moves are fundamental. The talks about a new Japanese Prime Minister are bound to cause moves that ignore technical levels.
