Monday’s trading session was very calm for the USD/JPY exchange rate with the pair trading in an extremely narrow range slightly below the 55-hour SMA. This situation changed on Tuesday morning when risk-averse investors shifted their funds to the Yen as a safe-haven currency. Thus, the rate returned to its two-week low of 109.00.
It is more likely that the given pair falls even lower, as the 200-period SMA on the 4H chart was surpassed earlier in the day. This would push the rate closer to the weekly S1 near 108.50. This bearish scenario should likewise be confirmed by the US Dollar failing to surpass the 55– and 100-hour SMAs circa 109.50.
In case this area is breached, the rate should target the weekly PP or the 200-hour SMA at 109.90 and 110.20, respectively.
