Since Wednesday afternoon, the USD/JPY currency pair has been testing the resistance level—the weekly R1 at 106.17.
If the predetermined level holds, it is likely that the exchange rate could reverse south in the nearest future. In this case the rate could decline to the support formed by the 55-, 100– and 200-hour SMAs, as well the weekly PP in the 105.50 area.
However, if the given resistance level does not hold, the currency pair could continue to extend gains in the short run. In this case the pair could target the 106.40/106.60 area.
