On Wednesday morning, the US Dollar tested the combined resistance of the 55-, 100– and 200-hour SMAs and the 61.80% Fibonacci retracement. This area hindered USD/JPY for some time until strong bullish sentiment pushed it even higher towards the monthly R1 and a four-week trend-line at 110.80.
Some upside potential is still apparent in the market, as technical indicators have not yet reached the overbought territory. Gains are expected to be capped near the weekly R1 at 111.30. Conversely, the pair respecting the above trend-line should return it to the massive support cluster at 110.20.
Given the rather calm day in terms of data releases, it is unlikely that this barrier is breached to the downside. In general, the pair could be located near 111.00 on Friday morning.
