On the previous trading session, the USD/JPY currency pair traded down and reached the Fibonacci 38.20% retracement at 108.44. During Monday’s session, the pair reversed north from the lower boundary of the short-term descending channel at 108.10.
From a theoretical perspective, it is expected, that the exchange rate could continue to extend gains. In this case, the rate has to surpass the given Fibonacci retracement.
If the given level holds, it is likely, that the pair could trade down along the lower channel line located circa 108.00.
It is unlikely, that the rate could drop lower than the 107.73 due to the support of the weekly S1.
