Early in the American session, the Japanese Yen is trading around 147.50, above the 21 SMA, and above the 6/8 Murray. USD/JPY is rebounding, resuming its bullish cycle.
Yesterday in the Asian session, the Japanese Yen reached a low of 146.58 and since then, it started a technical bounce. If USD/JPY consolidates above 147.40, we could expect it to continue its rise until it reaches the top of the uptrend channel around 148.10.
The monetary policy of the Bank of Japan (BoJ) is a factor that keeps the Japanese yen weak. Whenever it recovers from an overbought condition, it resumes its bullish cycle.
Given that USD/JPY is located above the 21 SMA, this suggests a continued bullish trend. If this scenario comes true, we should expect a close below 147.40 on the 4-hour chart which could be seen as a signal to sell.
On the other hand, in case the Japanese yen continues to trade above 147.50, it is expected to extend its rise and USD/JPY could face resistance of 148.10, a level that coincides with the daily R_2 and weekly W_1, both are strong resistances.
Given that the Japanese yen is overbought according to the H-1 chart and given that the area of 147.80 has served as a strong barrier for the JPY in the past, this suggests that we could continue to sell below this area with targets at 146.87 and 144.93 that matches the 200 EMA.
