Bears have managed to take advantage of the weaker US Dollar, thus pushing USD/JPY to a new 2017/2018 low of 105.65. As a result, the pair was testing the weekly S3 and the lower boundary of two prevailing two-month channel on Friday morning.
Technical indicators suggest that the current movement south could prevail today, as well, thus sending the pair for a test of the senior channel circa 104.75. Given that the weekly S3 and the monthly S2 are located along the way, this decline might be limited to 105.00. Meanwhile, resistance is provided by the 55– and 100-hour SMAs, the weekly S2 and the monthly S1 in the 106.70/107.50 territory.
If US Building Permits released at 1330GMT do not introduce massive volatility in the market, the pair could trade sideways in this session.
