The bearish pressure continued to prevail on Monday, thus sending USD/JPY towards the combined support of the monthly S2 and the weekly S1 circa 110.30. Due to this cluster, the Greenback failed to reach the bottom boundary of a four-month channel circa 110.00. The test of this support was followed by a slight period of recovery until the rate reached the 55-hour SMA. Technical indicators suggest that the rate is likely to fail today, especially if its northern barrier is likewise reinforced by the 100-hour moving average. Even if the rate breaches the 110.30 area, its subsequent fall should not exceed the aforementioned channel. The pair’s movement would eventually lead to the breakout of a short-term descending channel and a possible surge.
