Early in the American session, the Japanese yen (USD/JPY) is trading around 141.14 above the 200 EMA above the 21 SMA and above the 6/8 Murray. We can observe a bullish correction after the price reached 141.94 on July 21.
This level of 140.62 has become strong support for the Japanese yen, which is expected to resume its upward cycle in the coming days and it could reach 7/8 Murray located at 142.18 and 8/8 Murray located at 143.75.
On the 4-hour chart, we can see that the Japanese Yen continues to trade within an uptrend channel formed since July 17. In the next few hours, it is likely to continue rising because it left a gap at 141.82 on July 24 at the opening of the Asian session.
Therefore, we expect that as long as it trades above 140.62 (6/8 Murray), it will be seen as a sign of a further uptrend towards the target of 143.75 (8/8 Murray) and 145.00.
The break of the bullish pennant pattern could be a negative signal for USD/JPY and it is expected to depreciate until reaching the psychological level of 145.00. The key will be to wait for it to consolidate above 141.60, then we can buy and the instrument could reach the 143.75 area.
Conversely, with a close below the 200 EMA and the 21 SMA located at 140.52, we expect a drop below the psychological level of 140.00. This move could mean a strengthening in the Japanese yen and USD/JPY could reach 139.06 and even reach 4/8 Murray at 137.50.
