Early in the European session, the Japanese Yen is trading around 134.57 above the 21 SMA and above the 6/8 Murray. On the 4-hour chart, we can see that the USD/JPY pair made a strong technical rebound from the low of 133.74 reached yesterday in the American session.
If in the next few hours, USD/JPY consolidates above the daily pivot point located at 134.37, we could expect the instrument to continue its rise and it can reach the 200 EMA located at 134.82 and finally, it could reach the strong resistance of 135.30.
Investors believe that the Federal Reserve has reached its final rate hike and intends to complete the tightening cycle which is contributing to US Treasury yield bonds losing their yield. Therefore, investors are taking refuge in the Japanese Yen and gold.
Since the beginning of May, the Japanese Yen has been trading within a price range between 135.30 to 133.70. It is probable that if it consolidates above 134.37 (6/8 Murray) in the next few hours, it could continue to rise until it reaches the 135.35 zone. Finally, it could reach 7/8 Murray at 135.93.
On the contrary, with a sharp break and a daily close below 134.37 (daily pivot point), we could expect it to fall towards the key support of 133.90 and 133.74.
The eagle indicator is giving a positive signal, hence, we can expect a technical bounce around 134.47 (21 SMA) or 134.37 to buy with targets at 135.35.