FX.co ★ Trading signal for USD/JPY on February 20-21, 2023: sell below 134.85 (3/8 Murray - strong resistance)

Early in the American session, the Japanese Yen is trading around 134.62, above the 21 SMA, and above 3/8 Murray. The instrument is following a bullish trend. In the next few hours, the pair is likely to continue its rise until it reaches the psychological level of 135.00 or the resistance zone of 135.12.

Bullish sentiment is driving the US dollar, being supported by expectations that the Fed will maintain its hawkish stance to rein in inflation. The Fed's aggressive agenda should continue to strengthen the major currency.

A pullback towards the resistance zone located at 134.85 or towards 135.12 will be seen as a signal to sell. Additionally, in case the Yen falls below 134.37 and below the 21 SMA, we could expect a bearish acceleration and the price could reach the 200 EMA located at 132.22 in the next few days.

If in the next few hours, the Japanese yen consolidates above 134.40, it is likely that it will continue its upward movement. A daily close above 135.15 could signal a bullish acceleration and the instrument could reach the 4/8 Murray zone at 137.50