Strong upside risks remain dominant for the USD/JPY exchange rate, as the rate has been supported by the 55-hour SMA since early last week. This move up has formed a neat short-term channel in a more senior pattern.
The US Dollar strengthened during the first hours of Monday’s trading session, thus being located near the weekly R1 and the upper boundary of the senior channel circa 111.60. Even if this level does not hold the rate, the monthly and weekly R2s at 112.10 should remain intact today, as technical indicators on the 4H ad 1D charts are pointing to a soon decline.
It is expected that the pair remains trading in the senior channel and thus reverses near the 111.80 area. Meanwhile, a fall below the 55-hour SMA at 110.70 should not occur today.
