USDJPY (113.76): The USDJPY recovered the losses from Monday, but price action remains muted near the 114.07 – 114.31 resistance level. Failure to break past this resistance level continues to increase the downside risks in price. Currently, the sideways range is expected to continue although, on the 4-hour chart, the break of the rising trendline could suggest some downside momentum. Support is seen at 113.00 which could be tested and would mark a correction to the downside. The inverse head and shoulders continuation pattern looks to be weakening in this scenario, and we expect that USDJPY could be posting further correction to the downside.
