The situation is far from clear.
Hello, dear traders!
In this article, we will analyze the technical factors for the dollar/yen currency pair. Taking into account the week that has ended and the new five-day trading period that has just started, let's start with the weekly chart.
Weekly
As expected in the previous article on USD/JPY, after the appearance of a highlighted candle, it was highly likely that the downward dynamics of the instrument could be expected. This is what happened, but the closing price of April 13-17 did not reveal the advantages of any of the parties.
As you can see, the last five-day trading ended right at the lower border of the Ichimoku indicator cloud. Closing the weekly session lower would indicate further downward prospects for USD/JPY as the most likely. However, this did not happen, and at the time of writing, the pair is showing moderate strengthening.
Based on the weekly timeframe, the resistances are at 108.30 (50 MA), 109.23 (89 EMA) and 109.53 (144 EMA). Support runs at 107.45 (the lower border of the cloud), 106.92 (last week's lows) and around 106.71-106.45, where the Kijun and Tenkan lines of the Ichimoku indicator are located.
Daily
Looking at the daily chart, we see that players need to break through a lot of resistance to increase the rate, which is represented by Tenkan, Kijun and moving averages of 50 MA, 89 EMA and 144 EMA, which have accumulated in the area of 108.50-108.65.
The nearest support is at 107.30, where the lows of April 17 were shown, and the next support level of 106.92 is slightly lower. It is quite possible to assume that even the passage of the last mark may have a false character, since at 106.71 the upper limit of the daily cloud passes, which can contain the likely decline and turn the course up.
In my opinion, only a downward exit from the Ichimoku cloud with a true breakdown of the level of 105.78 will indicate a bear market for USD/JPY.
H4
On the four-hour chart, the pair continues to trade below the used moving averages, which significantly reduces the upward prospects of the instrument. I assume that only an alternate breakdown of 50 MA, 89 EMA, and 144 EMA, with consolidation above the last moving average, will indicate that the pair is ready to continue moving in the north direction.
Based on this, I can offer accurate purchases after the breakdown of 108.20 (144 EMA), fixing above this level, on the rollback to the price zone of 108.20-108.00.
If a reversal bearish candle or a combination of candles appears when trying to break through this selected zone, you should think about opening sales.
However, these are recommendations for the technical picture on the 4-hour chart. Those who focus on larger time periods should look at the support and resistance levels that are indicated when describing the daily and weekly charts.
I can add that the situation for this currency pair is far from unambiguous, so before opening positions, you should wait for confirmation signals in the form of characteristic patterns of Japanese candlesticks. For many major currency pairs, the situation is currently uncertain, and there are no pronounced trends. In such an environment, it is better for those who do not want to take risks to stay out of the market and wait for more clarity.
Have a nice day!