USD/JPY Forecast: Falling channel intact, more losses if holds below 110.97

The Dollar-Yen pair closed below 110.97 (61.8% Fib R of 110.80-114.495) on Friday as the political tensions in the US weighed over the greenback. The pair remains below 111.00 this Monday morning, but the sellers have not been able to push the spot back to/below Friday’s low of 110.77… despite BOJ trimming the bond purchases. Clearly, the bears stand exhausted around the support offered by the falling channel. 

Technicals

Support

110.87 (Gann Fann support)
110.75 (falling channel support)
110.15 (76.4% Fib R of 108.80-114.495)

Resistance

111.18 (resistance on 1-hr chart)
111.60 (5-DMA)
111.86 (200-DMA)

4-hour chart

Observations
Falling channel
RSI almost oversold

Comments

• Friday’s close below 110.97 (61.8% Fib) did open doors for a further sell-off to 110.15 levels, however, the 4-hour RSI and the 1-hour RSI are both oversold at a time when the spot is taking support of 4x1 Gann fann line - 1.1186. Thus, a rebound to 111.60-111.80 could be seen, especially if the next hourly candle shows a bullish price action.
• Only a bullish break of the falling channel would signal the sell-off from the high of 114.49 has ended. On the other hand, a failure to take out 111.60-111.80 followed by a break below 110.97 could yield a sell-off to 110.14-110.00 levels.