Hello, dear traders!
Let's summarize the result of February trading on USD/JPY. We also will try to find entry points and determine a further trend direction.
Monthly chart
According to the monthly chart, USD/JPY increased sharply and closed at 106.55 in February. Notably, 106.00 is a very important level and the fact that the price closed above it indicates that the pair is likely to move in the upward trend. On top of that, February trading closed above the red Tenkan-sen line of the Ichimoku indicator. The orange EMA (144), as well as the blue Kijun-sen and the black EMA (89) line, could bring the price under pressure.
The quote is now passing through EMA(144) and Kijun-sen. March has just started. Therefore, it is too early to draw any conclusions. However, given a Bullish engulfing pattern, the upward trend is likely to continue. If the price closes above EMA(89) located at 107.22, it will confirm a change in the trend from a bearish to a bullish one. Otherwise, if a bearish reversal candlestick occurs and the price closes below EMA(89), the pair's previous upward movement will be considered as a correction. In such a case, sell deals will be relevant again. I believe that bulls have regained control of the course of trading and the upward trend is highly likely.
Weekly chart
Two weeks ago, the pair broke through MA(50). As a result, a candlestick with a very long upper shadow occurred on the chart. A further direction of USD/JPY was unclear but the previous week defined everything. A big bullish candlestick with a closing price of 106.66, as well as a breakout at MA(50), revealed that bulls were still strong. Thus, the pair closed within the Ichimoku cloud during the last week of February. It is now trying to get out of it upward. Notably, the black EMA(89) is in line with the upward border of the weekly cloud, which only makes it stronger. Therefore, the price closing above EMA(89) will be even more significant. Today, it is only Tuesday. Given the publication of the US Labor Market report on Friday, market sentiment could change as well as the technical picture on USD/JPY. Nevertheless, taking into account the situation in the two higher time frames, the pair is likely to rise to the closest target in the 107.00-107.25 region. Currently, it is the right time for buying USD/JPY. One should enter long after a short-term pullback to 106.70, 106.55, and 106.40. Sell deals will be relevant if reversal Japanese candlestick patterns occur in a strong price range of 106.90-107.20 on the H4, H1, and daily chart. At the same time, it will be risky to sell the pair against the current upward trend.
Have a nice trading day!
