01.12.202204:54 Forex Analysis & Reviews: Trading Signal for USD/JPY on December 01-02, 2022: buy above 136.50 or if it rebounds at 135.93 (-1/8 Murray - bearish channel)

Early in the Asian session, the Japanese Yen is trading around 136.68. We can see on the 4-hour chart that USD/JPY remains trading within a downtrend channel which has been unfolding since November 17.

In the American session, the USD/JPY pair reached the top of the downtrend channel around 139.88. As it failed to break this strong resistance, due to the fact that a symmetrical triangle formation also converges at that same level, the yen made a strong technical connection breaking the 21 SMA located at 138.54.

The technical analysis with the fundamental analysis goes hand in hand. This can be verified because in the afternoon of the American session yesterday, the Chairman of the Federal Reserve, Jerome Powell, said that the US central bank could reduce the pace of interest rate hikes in December. This caused a fall in the dollar which benefited the Japanese Yen, gaining almost 300 pips in one day.

In case there is a technical rebound around the support 136.50 or 135.93 in the next few hours, we could expect a technical correction towards the 21 SMA located at 138.54.

On the other hand, if USD/JPY finds support at -1/8 Murray around 135.93, this level will serve as the key due to the fact that it is a zone of technical reversal. It is likely that it will give us an opportunity to buy, with targets at 0/8 Murray located at 137.90 and at the top of the downtrend channel around 139.06.

The eagle indicator could find strong support around the uptrend channel, which could be a signal to buy the Japanese Yen in the coming hours.

Our trading plan for the next few hours is to buy the Japanese Yen around 136.50, with targets at 137.50 and 138.54. Additionally, we can buy if JPY/USD consolidates around 135.93 (-1/8 Murray) with targets at 137.50 and 139.06.