Early in the American session, the Japanese Yen is trading around 147.14 within an uptrend channel formed since August 23rd. We can see a retracement after the price reached the high of 147.36, the level last seen in November 2022.
USD/JPY is located above the 21 SMA and above the 6/8 Murray, which means that it is in a strong uptrend. In the next few hours, we expect the yen to consolidate below 147.36. Therefore, we expect a strong technical correction to occur towards the 21 SMA located at 146.57, which could be used as an opportunity to buy.
The Japanese Yen is expected to continue rising in the coming days as the market is bullish on comments from Fed Chairman Jerome Powell who stated that the central bank may have to raise interest rates by another 0.25% by the year end. Such prospects could be a factor that drives the Japanese yen in the short term, so any reversal could be seen as a signal to continue buying.
Our trading plan for the next few hours is to sell the USD/JPY pair below 147.36 with targets at 146.54 (21 SMA) or 146.30. A technical bounce is expected to occur at this level because of the overall uptrend. The eagle indicator is giving a negative signal, which is likely to cause a technical correction in the next few hours.
