Yesterday, the USD/JPY currency pair declined to the weekly S1 at 106.32. During Wednesday morning, the pair was testing the given level.
Given that the exchange rate is pressured by the 55– and 100-hour SMAs near 106.70, it is likely that some downside potential could prevail in the market. Note that the rate could gain support from the lower boundary of a falling wedge pattern in the 106.10 area.
If the given pattern holds, it is likely that a reversal north could follow. Otherwise, it is likely that the currency pair could decline to the monthly S1 located at the 105.90 mark.
