Forex: USD/JPY still weak after Thursady plunge

The most important development which disrupted the steady sideways movement of the USD/JPY pair was the 52-pip plunge during the second part of Thursday. This resulted in a breakout of the 55– and 100-hour SMAs and two channel lines, being stopped solely by the support of the 55-period (4H) and 200-hour SMAs and the monthly R2 near the 112.35 area.

Technical indicators are bullish for this session, suggesting that this support cluster might hold the pair and thus reverse it back to north. In this case, the upside target is either the psychological 113.00 mark or the weekly R3 at 113.35.

Meanwhile, a successful southern breakout from 112.20 is likely to pressure the US Dollar close to the monthly R1 at 111.50.