Early in the American session, the Japanese Yen is trading around 143.08 rebounding, having reached a European session low of 142.93. We can expect the Japanese Yen to resume its bullish cycle in the next few hours and it could find a resistance zone around 8/8 Murray located at 143.75.
According to the 4-hour chart, we can see that the Japanese yen is trading within an uptrend channel formed since June 8. It is now showing signs of exhaustion, So, a technical correction is likely to occur only if the instrument breaks this channel and consolidates below 142.67.
In case the Japanese yen continues to rise, we could expect a daily chart close above 143.87 and the price could reach the psychological level of 145.00.
On the contrary, a trend reversal is expected to occur only if the Japanese Yen consolidates below the 21 SMA at 142.67. Then, it could reach the psychological level of 140 and finally, the 200 EMA located at 139.51.
This week, there will be inflation data from the United States which could generate strong volatility movement in the Japanese yen. If the data is positive for the US dollar, we could expect USD/JPY to reach the 145.00 level. In case the US data is negative, we could expect a strengthening of the Japanese yen and USD/JPY could reach the zone of 7/8 Murray located at 142.18 and could even reach 6/8 Murray at 140.62.
Since June 23, the Eagle indicator has been giving an extremely overbought signal. It means that any bullish movement could be seen as a signal to sell only if USD/JPY trades below 143.85 with targets at about 140.00.
