Early in the American session, the Japanese Yen is trading at around 136.69. This level represents the low of July 12.
On July 20, USD/JPY reached the resistance zone of 138.85. Having failed to break above the high of 139.38, it made a strong technical correction and is now reaching support levels.
Since the beginning of the week, investors have been waiting for the policy update from the Bank of Japan, which defied the world tightening trend and maintained its ultra-loose monetary policy. The central bank reiterated its commitment to continue buying Japanese government bonds at an annual rate of about 80 trillion yen.
In the next few hours, we expect the Japanese to bounce off 136.50 and reach the 21 SMA zone located at 137.94.
The Eagle indicator is approaching the oversold zone. Consolidation above 136.50 is likely to be seen as a buying opportunity.
On the other hand, should there be a pullback towards 137.94, it will be a positive signal to sell with targets at 136.50 and the 200 EMA at 135.50.
