Early in the American session, the USD/JPY pair is trading around 130.65 above the pivot point of 130.50 and within a daily downtrend channel formed since October 21.
USD/JPY is trading above the psychological level of 130.00, now moving away from multi-month lows. The pair is waiting for the US PMI data and FOMC minutes to be released in the next few hours.
The pair strengthened, having reached the low of 129.50 on January 3. This level coincides with the low at the beginning of June 2022. The yen has recovered due to a broad-based drop in the US dollar and the decline in US Treasury yields.
According to the daily chart, we can see that since January 1, the yen has reached the extremely oversold zone around 5 points. The odds are that the yen will have a technical rebound in the next few hours. So, the instrument could rise above 130.50 with targets at 2/8 Murray located at 131.25 and 132.11 (weekly pivot point). Besides, USD/JPY is even expected to reach the top of the downtrend channel around 133.70 in the next few days.
Our trading plan for the next few hours is to buy the Japanese Yen above 1.3050 or at current price levels, with targets at 131.25 and 132.11. The eagle indicator is giving a positive signal which supports our bullish strategy.
