Tuesday’s trading session was spent in a calm manner for the USD/JPY exchange rate, as it remained pressured to the downside by the 200-hour SMA. Meanwhile, support was provided by the lower boundary of a seven-week channel.
This lack of movement shifted dramatically during the Asian session when the pair shot up 51 pips within two hours, thus instantly breaching the 55-, 100– and 200-hour SMAs and the weekly PP. This move stopped near the short-term channel circa 109.80. It is expected that this surge leaves the rate stable for a couple of hours.
Meanwhile, given the strong support cluster formed by the breached moving averages, the US Dollar should maintain its northern direction in this session. In case the weekly R1 at 110.00 is surpassed, the next resistance is set by the 51.80% Fibo at 110.20.
