The high volatility of the USD/JPY currency exchange rate, which was caused by the head of the US Federal Reserve Jerome Powell revealed the borders of a channel down pattern, which appears to have guided the rate down throughout this week.
On Wednesday, the rate bounced off the upper trend line of the pattern and passed the support of the 50-hour simple moving average. By the start of the day's US trading, the rate had reached the 113.00 mark. Note that the 113.00 level has managed to impact the pair during the week.
In the case that the USD/JPY currency rate passes the support of the 113.00 level, the pair could reach the 112.50 level. The 112.50 level is being strengthened by the weekly S1 simple pivot point. A move below the 112.50 mark is likely to result in a decline to 112.00 and the lower trend line of the channel down pattern.
However, a recovery of the US Dollar against the Japanese Yen would test the combined resistance of the 50-hour simple moving average, the upper trend line of the channel and the 113.50 level. A move above 113.50 could find resistance in the 100-hour simple moving average near 113.75.
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