In the mid-term bearish trend
From mid-April until today USDJPY is rising almost vertically, now reaching 113.04 (compared with 108.11 in the middle of April). Within the mentioned period, growth was not interrupted by any correction which makes investors awaiting declines.
At the moment when the downward movement on the USDJPY occurs it can take quite violent form and bring the price even below this year’s minima. Undoubtedly bearish trend visible in the medium term will support it.
Movement inside declining channel
The downward movement that we observe on the USDJPY since December 2016 takes place inside a bearish channel. In mid-April the lower limit of this channel was tested, and currently its upper limit is being tested.
From this how will the price behave at the current level may depend the direction of movement in the medium term. Optimal behavior for demand would now be to enter into consolidation, after which price would break out from it and break the channel.
If demand breaks the upper bound of the downward channel, then this will be the first significant signal that USDJPY is returning to its medium-term upward trend. However, if supply is going to be stronger then pair will quickly be pushed back to the level of the first stronger support at 111.00.
