Hello, dear traders!
Although it is Wednesday today, let us begging our review of the dollar/yen pair with technical analysis of the trading results of the previous week. As a rule, such an approach gives a more comprehensive technical picture and helps determine the future trend.
Weekly chart
There is a candlestick with a very long upward shadow on the weekly chart, which means that the quote may well go down this week. Nevertheless, bulls seem to be strong enough not to lose control of the market. At the moment of writing, the dollar/yen pair showed strong and steady growth. Bulls were trying to break the important technical and psychological level of 115.00. If the quote settles above this mark at the close of this trading week, the previous bearish candlestick will lose its importance and the price will extend its upward movement to the range of 115.80-116.20.
Anyway, the market awaits the release of the Federal Open Market Committee Minutes set to be published today. If the content of the report confirms the Federal Reserve's hawkish stance on monetary policy, the greenback will receive good support and strengthen versus the Japanese yen. Otherwise, the second candlestick with a long upper shadow may form and the price may fail to break the 115.00 barrier. If so, the trend is likely to reverse down. Overall, the FOMC Minutes could provide support for the greenback as the voting Committee members have recently made some noticeably hawkish comments. In a few hours, we will see how the market reacts to the report.
Daily chart
As the daily chart shows, bulls broke through 115.00 yesterday, closing at 115.13. Nevertheless, it would be unwise and premature to make a decision based on a single candlestick that closed above or below one level or the other. For that reason, the results of today's trading day are of utmost importance. At the moment of writing, bears were trying to regain control over the important psychological level of 115.00. Amid uncertainty in the market ahead of the publication of the FOMC Minutes, traders should refrain from trading the pair. Only after a breakout at 115.00 and the subsequent pullback to this level, they could consider entering long positions on USD/JPY. At the same time, it is important to remember that due to a more hawkish Federal Reserve, the instrument is now moving upward. So, traders should stick to the strategy aimed at going long today.
Good luck!