As promised earlier, at the beginning of this week, we return to the consideration of a very peculiar and interesting dollar/yen currency pair. In the current situation, when the geopolitical situation in the world related to Russia's military special operation in Ukraine, to put it mildly, leaves much to be desired, investors decided to give their preference to the US dollar. Let me remind you that both currencies of this pair, depending on the situation and market sentiment, are considered protective assets. I fully admit that market participants decided not to break the technical picture and continue the upward trend for this currency pair. In such a situation, fundamental factors are often ignored or simply ignored by the market.
Although yesterday's data on initial applications for unemployment benefits in the US came out worse than expected, and the consumer price index coincided with the forecast values, this did not prevent the US currency from continuing to strengthen against the Japanese yen. In today's economic calendar, you can pay attention only to the American data on the consumer sentiment index from Reuters/Michigan. However, I do not think that this report will have any particular impact on the price dynamics of USD/JPY. To a greater extent, the strengthening of the US dollar is influenced by the expectation of the Fed raising the main interest rate this month. But this is not news anymore, therefore, in my personal opinion, the technical picture is at the forefront of the price dynamics of the dollar/yen pair, which we are moving to right now.
Daily
As can be seen on the daily price chart, the pair continues its upward trend for the fifth day in a row. In addition, at the time of writing, there is particularly strong growth. The pair confidently and powerfully breaks through the key resistance of sellers at 116.35, showing readiness and ability to move further north to new highs. The previously highlighted reversal model of candle analysis "Shooting Star" could not break the upward trend, but only provoked a corrective pullback to 114.67, where the pair found strong support and turned up again. If the quote is fixed above the resistance of 116.35, its breakdown can be considered true, and prepare for purchases on a rollback to the broken level, if it takes place, of course. Naturally, it will not be today, so for possible recommendations today, we will turn our attention to smaller time intervals.
H1
It is the hourly chart, in the personal opinion of the author, that is the most suitable timeframe for opening positions and determining the price at which it is worth entering the market. However, in this case, despite the increased bullish trend, it is risky to buy at the very peak of the market, especially on the last day of weekly trading, when a corrective pullback may take place against the background of profit-taking. In this regard, I suggest not to rush and wait for Monday, when, taking into account the closing of weekly trading, perhaps the situation for opening positions will become more interesting and understandable. In the meantime, on the hourly chart, I recommend waiting for a corrective pullback towards the broken resistance level of 116.35, and already near this mark, consider opening long positions on USD/JPY.