May 4 (Reuters) - FX traders could take USD/JPY higher after last week's slump caused by likely direct intervention as key technical levels continue to limit the downside.

On Friday USD/JPY dropped from 160.72 to 155.49 to hit its lowest level since February, testing the 155.50 Fibonacci level, before recovering. The 155.50 level is a 61.8% retrace of the 152.28 to 160.72 (February to April) EBS rise and it is seen as key support. The 61.8% retracement is known by some as the "golden ratio" in the sequence due to its outsized significance in determining the direction of the price action.

While direct intervention is a strong political tool to influence the market, it usually does not change the long-term dynamics of a currency pair's direction.

While USD/JPY has traded below the Ichimoku cloud, which currently spans the 156.29-158.11 region, only a daily close below this region would prevent a potential bear-trap. A potential bear-trap is usually a bullish signal and could see the market rebound after last week's likely intervention. USD/JPY dropped once again on Monday, fuelling speculation of renewed Japanese buying to stem the yen's long-running slide. As Japanese markets are closed on Monday through Wednesday for the Golden Week holiday, that could cause wild swings in the yen owing to thin liquidity.
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(Martin Miller is a Reuters market analyst. The views expressed are his own)