The USD/JPY exchange rate has been guided by bearish sentiment for the second consecutive session. The pair has fallen 135 pips during this time, thus dashing through various support levels along the way.
By Thursday morning, the pair was located near the 105.75 mark where the weekly S1 and the upper boundary of a three-month channel is located. Technical indicators are located in the strongly bearish area, suggesting that some upward correction should occur soon.
It is likely that the Greenback forms a retracement form the senior channel circa 105.50 and pushes for the weekly PP and the 55– and 100-hour SMAs near 106.40.
In case no fundamental events shake the market in this session, the pair is unlikely to breach this area, thus remaining in the 105.50/106.40 range.
