As promised in yesterday's article on the dollar/yen currency pair, today we will look at the technical picture at smaller time intervals to find the most optimal options for opening trading positions. However, to complete the picture, let's go back to the daily chart to see how the first trading day of the current five-day period ended.
Daily
I should immediately note that, despite yesterday's downward trend, there were no significant changes in the daily timeframe. The pair is still trading within the daily cloud of the Ichimoku indicator, where the blue Kijun line serves as support, and yesterday the important technical mark of 109.00 and the level of 23.6 fibo from the growth of 102.60-110.97 were used as resistance. I would like to emphasize once again that even leaving the price above the level of 109.00 will not solve all the problems of the bulls for the instrument, which need to break through the price zone of 109.09-109.17. This is where the blue 50 simple moving average and the red Tenkan line of the Ichimoku indicator are located. Only the breakout of the latter will indicate the bullish mood of the market for USD/JPY. As you can see, today's attempts of the bears to push the Kijun on the instrument at this stage of time were not successful. After the decline to 108.56, the pair left a tail (shadow) at the bottom and is now trading near 108.75.
H1
The hourly chart shows a bearish picture. This can be judged by the fact that the price is below all three moving averages used: 50 MA, 89 EMA, and 144 EMA. The first of them (50 MA) has already begun to actively resist attempts to grow. However, there are two older moving averages at the top. However, we must also pay tribute to the strength of the support, which takes place in the price zone of 108.61-108.56 and has repeatedly sent the quote up.
Trading recommendations for USD/JPY:
Given the current technical picture on both timeframes considered today, right here and now I would recommend not to take any action, that is, not to open positions. For purchases, it is necessary to wait for the successive breakdown of all three hourly moving averages and the level of 109.00, after which, on a pullback to the price zone of 109.05-108.95, consider opening long positions. Sales also require one, but a very important condition. You need to wait for the breakdown of the support zone 108.61-108.56, the mandatory consolidation below, and then on the rollback to the broken zone, consider options for opening short positions. The situation is quite difficult. Thus, in order not to catch a stop, it is better to be patient and enlist the support of the relevant and indicated above signals. Sooner or later, the pair will leave the current price range, especially since it is quite narrow.
