The US Dollar continued to appreciate against the Yen for the second consecutive session on Friday. Despite this upside movement, the pair was generally trading sideways in the 107.20/80 range.
Downside risks prevailed during the Asia session which pushed the rate down to the 55-, 100– and 200-hour SMAs and the weekly PP circa 107.20. The bottom boundary of a four-week channel is likewise located there. The Greenback should eventually breach this channel to the downside and test the 106.70 area, as it has not been able to surpass 107.65 for several sessions.
However, technical indicators suggest that a breakout of the aforementioned support cluster should not occur today. In this case, a possible upside target is the weekly R2 at 108.00.
