Yesterday, the USD/JPY currency pair plunged to the psychological level at 111.70. However, during Tuesday’s morning, the pair reversed north to the 55– and 100-hour SMAs located circa 111.90.
From a theoretical point of view, it is likely, that the exchange rate trades down within the short-term descending channel. A possible downside target is the weekly S1 located at the 111.78 mark.
It is unlikely, that the pair could breach the given channel north due to the resistance level formed by a combination of the given moving averages and the weekly PP.
