USDJPY has been trading within a sideways channel in the daily timeframe since April 2017 with upper boundary the 114.50 significant and multi-tested resistance level, and with lower boundary the 108.20 support level, which has been penetrated once in September.
Currently, prices are developing below the 110.50 barrier and the 20-day simple moving average. The pair tested several times the 20-SMA, which is acting as a strong resistance level. However, the short-term technical indicators are slightly bullish and point for more upside movement in the market. The RSI indicator is pointing up in the negative zone, while the MACD oscillator is rising and jumped above its trigger line, creating a bullish crossover.
Upsides moves are likely to find resistance at 110.50. Rising above this area could help shift the focus to the upside towards the next immediate critical level at 111.50, which coincides with the upper Bollinger Band at the time of writing.
On the flip side, if dollar/yen reverse lower, the next level to have in mind is the 108.20 (lower boundary of trading range), which overlaps with the lower Bollinger Band. A drop below this area could take the pair below the sideways channel, challenging the 107.30 support level, taken from the low on September 8.
It is worth mentioning that USDJPY has been developing within a symmetrical triangle in the medium-term timeframe since May 2015. The symmetrical triangle is a continuation pattern, indicating further gains in case of a penetration to the upside on a weekly basis.