By Mohammed Isah of fxtechstrategy.com

The

USD-JPY

is still trading within a broader falling channel, even though the pair recovered to as high as 91.70 this week after hitting a year-to-date low of 84.80 in early November.

Click

here

to see a chart of the pair.

Immediate risk is to the upside, but we retain our medium-term downside bias on the currency pair, with the risk to our analysis being a decisive break and hold above the aforementioned falling channel currently located at 93.46.

On the downside, with the Dec. 4 high at 90.77 violated, we expect that level to reverse roles and provide support if tested, thereby turning the pair higher again.

However, if a trade below that level occurs, we should witness further downside pressure toward the 88.30 level, the Dec. 14 low, with a breach there setting the stage for further weakness toward the 87.35/87.10 levels.

On the upside, if the 93.45 level, its channel top, is eventually violated, a run to the upside toward the .50 Fibonacci retracement at 95.00 (101.43-84.80 decline) should follow, with further price extension targeting the next upside objective located at 97.77, the Aug. 7 high.

The weekly studies are bullish and pointing higher, suggesting further strength. On the whole, though immediate risk remains to the upside, the overall medium-term trend remains to the downside.

Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces

The Professional Suite

for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.