The weekly R1 at 109.90 proved to be an unbreakable resistance for USD/JPY during the previous session; thus, the pair was pressured down to the bottom boundary of a five-week channel. This fall was limited by the 55-, 100– and 200-hour SMAs which have since restricted solid advances either direction.
By the time of this analysis, the US Dollar had surpass the two longer-term SMAs and was moving towards the 109.70 level. Technical indicators suggest that it could still push higher, thus setting the 61.80% Fibo at 110.20 as today’s high.
However, it should still be taken into account that the rate could continue trading in line with the prevailing wedge pattern and therefore fall down to its lower boundary located at 109.00. This bearish scenario should occur if 109.30 is breached.
