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Today we
are going to the dollar/yen pair. Since it is still only the beginning of
weekly trading, let's analyze the results of the previous trading five days and
take a look at the weekly price chart. The imminent appointment of the US
Federal Reserve head has already been mentioned in today's Euro/Dollar article,
as well as Jerome Powell's next speech. In this regard, let's take a look at
the weekly timeframe.
Weekly
So, USD/JPY could not continue the growth of the previous week and went down during the trading week of November 1-5, ending the previous five days at 113.42. This trading pattern is clearly bearish and is confirmed by the current continued depreciation. USD/JPY was trading near 112.86. Given the strength of the technical level 113.00, this week's close under that level would further reinforce the bearish sentiment on this trading instrument. Only a true break-up of the key resistance level at this stage, 114.72, with an inevitable consolidation above that level, will turn the dollar/yen into a bullish mood. If the market goes into a bearish trading scenario, the USD/JPY risks falling to another quite strong and significant level at 112.00. To summarise, a continuation of the downward scenario seems most likely. This implies the selling of the pair.
Daily
On the daily chart, the pair has already consolidated below the red Tenkan line of the Ichimoku indicator and is now testing the blue Kijun line for a breakdown. If today's trading ends below the Kijun, it would create good prospects for a further move southwards. However, it might be wrong to judge a true break-up of a level or a line by a single closed candlestick. Nevertheless, a break-down of the support at 113.28, followed by a pullback to the broken line, and a reversal downwards can be considered as the market choosing a southerly direction. Based on this, it is recommended to look for options to sell USD/JPY after insignificant and short-term pullbacks or bounces upwards. The most relevant points to open short positions are considered to be 113.20, 113.35, and 113.60. Based on the two timeframes, a downward scenario of the price movement of the currency pair dollar/yen is most likely.