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The yen is trading around 130.66 with a bullish bias but at the overbought levels. There could be a technical correction in the next few hours in case of a break of the uptrend channel forming since May 27th.
Last week, USD/JPY reached a high of 130.97. This week it could edge higher and reach the resistance zone 6/8 Murray around 131.25.
USD/JPY weakened further after the release of the US employment report. The price rolled back to the level of May 9 at 130.78. Currently, it remains close to highs, but a technical correction could occur in the coming days.
US economic data was mixed. Non-farm Payrolls increased by 390,000 in May, above the market consensus of 325,000, and the unemployment rate remained at 3.6% (consensus: 3.5%). This was favorable for the US. The yen is likely to continue rising to 131.25.
On the 4H chart, the yen is expected to continue its uptrend. It may reach the resistance 6/8 Murray (131.25). A pullback will be seen as a sell opportunity with targets at the 21 SMA around 130.10.
In case the yen fails to reach the resistance at 131.25 and breaks the uptrend channel and consolidates below the 21 SMA around the psychological level of 130.00, then it will be a signal to sell with targets at 5/8 Murray around 128.12 and even up to the 200 EMA located at 127.94.
The eagle indicator has reached the extreme overbought zone which is imminent that in the next few hours there will be a technical correction. Should it happen, we can sell below 131.25 (6/8) or if a break occurs at 130.10 (21 SMA) with targets at 128.12 (5/8).
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