Early in the European session, USD/JPY is trading around 141.70 below the 21 SMA and below the 7/8 Murray.
We can see that the Japanese Yen is inside an uptrend channel formed since June 8.
The yen shows weakness against the US dollar. So, if it breaks and consolidates above 142.00 in the next few hours, we could expect it to continue rising.
USD/JPY continues with the upward outlook according to the H4 chart, but is at a crossroads, but still unable to consolidate above 142.24 (22 Nov 2022 high).
If USD/JPY surpasses 142.24, the next resistance will be at 143.52, the price level of October 5, 2022. The instrument could reach 8/8 Murray located at 143.75 and even reach the psychological level of 145.00.
On the contrary, in case USD/JPY breaks the uptrend channel sharply and consolidates below 141.50, we could expect a bearish movement and the price could reach the 6/8 Murray at 140.63 and finally, reach the 200 EMA located at 138.97.
Investors believe that the Japanese government and the Bank of Japan are likely to take action if the Japanese yen continues to weaken and reaches the 145.00 level.
The Eagle indicator is in a neutral zone and has some distance left to continue giving a positive signal, but we could expect a bearish move if USD/JPY breaks below 141.60.
On the other hand, above 142.00 the signal could be positive and USD/JPY could continue its upward path.
Our trading plan for the next few hours is to wait for the Japanese Yen to break out of the consolidation zone and give either a positive or a negative signal. In this case, we expect a clear signal to sell below 141.60, with targets at 140.63 and 139.06.