USD/JPY - bearish move from upper boundary of channel?

After tumbling all the way to 103.20 the week prior, USD/JPY price recovered in a dramatic fashion last week. Price bounced from the lower boundary of the daily channel structure and the ascending weekly trend. As a result, on Monday, we saw a huge 200+ PIP move, which placed the pair back at the 105.15 level. The upper boundary of the channel held price in place for the remainder of the week.

Although we had a significant bullish move last week, our outlook is still bearish for this pair, and will be until we get a higher high created on the daily timeframe. This week a bearish move from the upper boundary of the channel structure is highly likely, given the precedent set. This would see price return to 104.35 initially, before possibly continuing down to retest the weekly ascending trend.

With regards to a bullish scenario, if price manages to break to the upside from the descending daily channel structure, we could then anticipate price pushing up to 106.04. Both possibilities will be on our watch list for the upcoming week.