By Wednesday morning, it had returned for a re-test of the 200-hour . Technical indicators suggest that this session might mark a further decline, possibly down to the nearest support of the weekly S1 at 108.88 or the bottom channel line located nearby.
Given that no significant fundamentals are to be released today, the Greenback might spend this session within the 108.80/109.70 range. Subsequently, this currency should gain strength and breach the most junior channel drawn on the chart with dashed lines.
USD/JPY continues to trade in the same for the second consecutive day. After testing the weekly S1 at 109.00, the US Dollar managed to gain momentum and re-test the weekly PP at 109.60. It has since been supported by the 55– and 200-hour SMAs.
In terms of today’s trading session, it is likely that bulls try to push higher within the following hours, as clear upside potential still exists in the market. If the weekly PP and the two-week trend-line are breached, this might be an early indication of a subsequent surge at least up to the monthly PP circa 110.30.
On the other hand, the rate’s failure to edge higher should result in a breakout of all three moving averages and a decline down to the weekly S1 and the bottom boundary of a two-week channel near the 108.80 mark.
USD/JPY spent Thursday’s morning in between the bounds of the weekly PP and the 100-hour SMA. However, as risk-averse investors started buying the Yen mid-session, the US Dollar fell 100 pips within a couple of hours, thus dashing through the strong support of the 100-, 55– and 200-hour SMAs. This fall was stopped solely by the bottom boundary of a two-week channel near the 108.60 mark.
Technical indicators suggest that this period of decline could continue in this session, as well, especially if the current stock volatility persists. In addition, no significant events that could push the rate above all three SMAs at 109.30 are scheduled for today.
In case of strong bearish sentiment, the ultimate low should be the senior channel at 108.00, while a more possible target is the bottom line of the junior pattern near 108.60.
The US Dollar was fluctuating considerably against the Yen during the previous trading session. The pair tried to edge higher in the morning but was stopped by the strong resistance of the 55-, 100– and 200-hour SMAs. It subsequently fell down to the 108.30 mark—slightly above the bottom boundary of a medium-term channel.
The US Dollar might still appreciate in this session; however, gains should be limited by the aforementioned SMAs and the weekly PP near the 109.20 mark. This could pressure the pair down to the weekly S1 at 108.00.
Given that there is a bank holiday in Japan and no fundamentals coming from the United States, this session could mark no major changes to the pair’s current position, unless high turbulence in the equities market result in higher demand for the Yen.
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