FX.co ★ Technical analysis and trading recommendations for the USD/JPY currency pair. Weekly review

Day timeframe

Ishimoku:

The price headily jumped up, but it could not strengthen higher Ishimoku indicator and the first resistance level that means that downtrend is more likely to continue. The price is above Tenkan-sen and Kijun-sen. Tenkan-sen reversed and is up directed that signals about downtrend ending. Sale signal is substantively weakened that is why if in near term the price does not comes back to the area lower Kijun-sen than sale signal will be canceled. As for now, sale signal is working out further so purchases are not considered, but at that, sales are also questionable. Kijun-sen is down directed that means that downward movement can refresh. In this situation, it is necessary to wait for clearing of the situation or purchase signal forming or sale signal strengthening. Tenkan-sen and Kijun-sen lines of Ishimoku indicator are the support of current movement. The bounds of Ishimoku indicator are the resistance for the price. Ishimoku indicator is continuing its downward movement and narrowing that also signals about possible upward trend start. Chinkou Span is below the graph that signals about downward movement.

Bollinger Bands:

This indicator is showing downward movement. The lines are widening a little and down directed. As we can see, the price strengthened above the middle Bollinger Band that testifies about a possible ending of the downward trend, otherwise, a rebound will be next and the price can go down to the low Bollinger Band level.

MACD:

This indicator is showing a reverse and upward movement at the moment. Now the most likable variant of developments is a continuation of upward trend.

The trading recommendations:

For the USD/JPY currency pair the picture is not quite clear. Opening of long positions is recommended only after purchase signal formation from Ishimoku. Short positions are not interesting because of sale signal weakening. So it is recommended to wait for the clearing of the situation.

The picture clarification:

Ishimoku indicator:
Tenkan-sen — red line
Kijun-sen — blue line
Senkou Span A — light brown stipple line
Senkou Span B — light purple stipple line
Chinkou Span — green line
Bollinger Bands indicator:
3 yellow lines
MACD indicator:
The red line and the histogram with the white bars in the indicators window

Good luck in trading,
Stanislav Mikhailovich
December 8, 2009