Back in May, we set a downside target for the dollar/yen at 100. That target has been achieved despite the optimism from Prime Minister Shinzo Abe.
The way in which that target was achieved provides some guidance to what may develop next. There are two dominant chart features on the dollar/yen chart and they define the potential future price action.
The first feature is the powerful down sloping trend channel. From February 2016, the lower edge of the channel has provided a strong support feature. The upper edge of the channel provided a resistance level.
This pattern suggests that dollar/yen has a high probability of reacting away from resistance currently near 103 and retesting the lower edge of the trading channel, currently near 95. That's a particularly bearish outlook. It's theoretical and needs to be verified against previous price activity.
It's also important to note that a breakout above the upper edge of the trend channel signals a change in the direction of the trend. This change may include a consolidation sideways movement, or the beginning of a new trend. However, this is currently a lower probability outcome.