It seems that the rate could be ready to breach this pattern to the upside, especially if the southern barrier is guarded by the weekly PP , the 55– and 200-hour SMAs circa 109.30. Technical indicators are likewise supportive of this scenario, as they demonstrate that some upside potential still exists.
Apart from the 109.72 mark, the nearest resistance is set by the weekly PP and the monthly R1 near 110.40. This area is expected to be the daily high.
The US Dollar managed to continue its strong upside movement during the first part of Friday’s trading session.
Better-than-expected US employment data released at 1330GMT strengthened the Greenback by 40 pips within the first five minutes after the release, thus allowing it to test the 110.40 mark. The pair’s subsequent movement was a decline from this eight-day high towards the 55-hour SMA and the weekly PP at 109.69.
Technical indicators show mixed signals, thus the US Dollar is likely to remain stable in this session. In case the monthly PP does not hold, the upside target should be the weekly R1 near 111.00.
On the other hand, the daily low is expected to be the combined support of the 100– and 200-hour SMAs circa 109.30.
The US Dollar remained stable against the Yen on Monday until strong bearish momentum mid-session took over the market. As a result, the pair breached all three SMAs and the up-trend circa 109.00 and consequently plunged 1.04% throughout the day.
By Tuesday morning, the Greenback was showing some signs of recovery; however, it does face the previously breached support levels which have become strong resistance. Thus, it is likely that the pair remains tended southwards today. The nearest support is set by the bottom line of a five-month descending channel located near the 108.00 mark.
In terms of resistance, gains should be capped near 109.60.