Early in the US session, the Japanese Yen is trading around 131.70, making a rebound after reaching a low of 130.55. According to the 1-hour chart, the Japanese Yen has a zone of strong resistance around the 132.02 level which coincides with the top of the downtrend channel formed since March 31.
We can see from the chart that the USD/JPY pair has formed an uptrend channel since April 5th. It is likely that a technical correction might occur in the next few hours towards 4/8 Murray or towards the 21 SMA located at 131.27. It could be seen as a signal to buy with targets at 132.00.
Additionally, a sharp break and a daily close above the EMA 200 could confirm a bullish acceleration and the instrument could climb to 132.81 and finally reach 133.67.
Conversely, with a break below 131.35, the Japanese yen could accelerate its advance against the US dollar and it could reach the 3/8 Murray support zone located at 129.68.
Our trading plan for the next few hours is to sell at current price levels around 131.09 or in case of a pullback at 132.02 with targets at 131.27 (4/8 Murray) and 129.69 (3/8 Murray).
The eagle indicator is giving a neutral signal. Therefore, as long as USD/JPY trades below the 200 EMA, we could expect a technical correction. This will give us a signal to sell or buy while trading within the range marked on the chart.
