Early in the American session, the Japanese Yen is trading around 139.78, below the 21 SMA, and below the 6/8 Murray. On the 4-hour chart, we can see that the Japanese yen reached the psychological level of 140.00 and managed to form a double top around 140.91/93.
We can see that the USD/JPY pair has broken sharply to the downside of the uptrend channel formed since May 9 and could now come under bearish pressure.
If a technical bounce occurs towards the 140.45 zone or towards 140.10 (21 SMA) in the next few hours, this could be seen as an opportunity to resume selling orders.
In case this scenario comes true, the instrument could reach the 5/8 Murray in the next few days at 139.06 and finally, it could reach the 200 EMA located at 136.52.
On the other hand, a break above the 140.92 high will invalidate the double top pattern. However, buyers will need to break above 141.00 to confirm the resumption of the bullish scenario.
Our trading plan for the next few hours is to wait for the Japanese Yen to reach the 21 SMA zone located at 140.10 or 140.45 to sell with targets at 139.06 (5/8 Murray) and 136.52 (200 EMA). Since May 25, the eagle indicator is giving an extremely overbought signal, which supports our bearish strategy for the next few days.
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