Early in the American session, the Japanese yen (USD/JPY) is trading around 136.18 above the 21 SMA and above the 200 EMA. We can see strong weakness in JPY and it is likely to continue in the coming days.
The strong technical bounce from the low of 135.53 seen in the European session is a positive sign. We could wait for a technical correction to continue pushing the price higher so that we could buy. USD/JPY could reach the high of March 2 at 137.09
The weakness of the Japanese Yen is supported by markets believing that the US Central Bank will maintain its hawkish stance and keep rates at elevated levels for longer. Such prospects are bearish for the Japanese yen and it could reach the psychological level of 140.00.
According to the 1-hour chart, we can see the formation of a symmetrical triangle, indicating that the USD/JPY pair broke in the European session. This pattern could give us a clear signal to buy if the instrument trades above 135.77.
In the next few hours, a technical correction is expected towards the area of 7/8 Murray located at 135.93, or in case the correction continues, we could expect the price to fall towards 135.77 (200 EMA). Both levels could offer us an opportunity to buy with targets at 136.65 and at 137.05.
On March 6, the eagle indicator reached the extremely oversold zone around 5 points and has been giving a positive signal ever since. USD/JPY is expected to continue to rise in the coming hours and any technical correction will be seen as an opportunity to buy.
