Instead of reaching new high levels or trading sideways, the USD/JPY retraced back down to the support of the 55-hour simple moving average. On Wednesday, the SMA had pushed the rate back to the 106.90 level, which provided resistance on Tuesday.
Note that the 106.90 level is the location of the upper trend line of a large scale channel up pattern, which is described in USD/JPY trading ideas publications.
If the rate manages to pass the 106.90 mark, it could immediately find resistance in 107.00. In the case of the 107.00 level not providing resistance, the pair should reach for the weekly R1 simple pivot point at 107.25.
On the other hand, if the 106.90 level provides resistance, the rate would first look for support in the 55-hour SMA at 106.77 and afterwards the 100-hour SMA near 106.55.
