USD/JPY: trading the red channel
There are two processes happening with USD/JPY now from the technical perspective.
From the upside, there is the resistance range of 105.47 – 105.50, enforced by the 200-MA. It is providing the roof for the pair’s movement which has only been checked a couple of times since last week.
From the downside, there is an obvious bullish pressure pushing the pair to trade above 103.35 where it currently is. Now, it is consolidating right below the resistance mentioned above. That means, it may reverse to go down to 105.20 – that you will see if the price fails to enter the 105.47-105.50 range. Otherwise, if it crosses the red zone, you will likely see a breakthrough to reach 105.60.
Therefore, watch the red channel for reversal chart formations or crossing signs, and set your trades.
