Strong upside momentum guided USD/JPY for the whole trading session on Monday prior to reversing to the downside early on Tuesday. The US Dollar returned below the monthly PP at 111.80 and is expected to remain there, as bearish technical indicators suggest the prevalence of downside risks. From technical point of view, the pair broke the descending channel patter; thus a retracement down to the 111.30 mark, approximately, is likely to occur. There, the 200-hour SMA should support the rate, thus limiting further depreciation. The 55– and 100-hour SMAs in the 111.35/45 area may likewise halt the pair. The most important fundamentals scheduled for today are data on consumer confidence at 1400 GMT and Fed Yellen’s speech at 17:00 GMT.
