Early in the American session, the Japanese Yen is trading at 145.72, below the 21 SMA, and above the 5/8 Murray. We can see that from the high printed yesterday in the American session at 146.46, the USD/JPY pair made a strong technical correction of almost 200 pips. So, a technical rebound is likely to occur towards 146.30 in the next few hours.
The 145.50 support area represents a strong bottom which coincides with the uptrend channel formed since the beginning of August. The odds are that the instrument is about to go through a technical rebound in the next few hours and it could reach 6/8 Murray at 146.87.
In case of a sharp break below 145.31, USD/JPY is likely to reverse its trajectory. If this scenario occurs, the yen could reach the 200 EMA located at 143.97 and even up to the 3/8 Murray at 142.18.
The eagle indicator is moving in the extremely oversold zone which means that the technical correction observed in the Yen could be seen as an opportunity to buy with targets at 146.87 and even at 148.43.
The Japanese yen could experience strong volatility on Friday as Non-Farm Payroll data will be released in the US. The yen could gain a strong upward momentum if the data is positive for the US dollar.
Our trading plan for the next few hours is to buy the USD/JPY pair above 145.60 with targets at 146.30 and 146.87. The Eagle indicator is in the oversold area, which supports our bullish strategy.
