24.05.202112:00 Forex Analysis & Reviews: Technical analysis and recommendations for USD/JPY on May 24, 2021

In today's article on the dollar/yen currency pair, the main priority will be given to technical analysis and analysis of several charts of the price of this trading instrument. As already emphasized in the previous materials today, the US dollar is not in the best of times. Even the sharp jumps in inflation and rather lengthy hints in the minutes of the last April meeting of the Federal Reserve about the possibility of reducing the volume of the quantitative easing program could not provide the US currency with full and stable support. So, at the auction on May 17-21, the Japanese yen strengthened against the US dollar by 0.40%. However, the technical picture for this currency pair is not so hopeless for the US dollar. Let's start the debriefing with a weekly schedule.

Weekly

Having stretched the grid of the Fibonacci instrument to the rise of 102.60-110.97, we see that the pair corrected slightly below the level of 38.2 fibo, after which it tried to resume the upward movement. What came out of this is visible on the weekly price chart. Above the level of 109.80, the USD/JPY bulls failed to raise the quote. And here again, we have to focus on the most important psychological and technical level of 110.00. First, after rising to 110.97, the players on the increase failed to keep the price above this landmark level, followed by a drop to 107.48. Secondly, repeated attempts to resume growth did not even reach 110.00, and this already indicates the current weakness of the bulls for USD/JPY and once again emphasizes the strength and significance of the level of 110 yen per dollar. The current and rather strong resistance to the price is provided by the red line of the Tenkan Ichimoku indicator. As you can see, the weekly candles close either above or below this line, which highlights the factor of uncertainty or uncertainty of trading participants regarding the further direction of the course. At the same time, in addition to the brown level of 107.48, the pair is well supported by the orange 144 exponential moving average, as well as the same Fibonacci grid level of 38.2. Thus, the price range on the weekly timeframe in which the pair is traded can be designated as 109.80-107.48. I believe that the exit from this corridor will help clarify the further direction of the quote. At the same time, a true break of the Tenkan line will increase the chances of an upward scenario, and a break of the 144 EMA will make the bearish course of trading the most priority.

Daily

The first thing that I would like to pay attention to is the factor of finding the pair in the daily cloud of the Ichimoku indicator. Let me remind you that the cloud itself is a zone of uncertainty, and the further direction of the exchange rate will largely depend on which way the price will come out of it. On this chart, the pair is trading in an even narrower price range. Support is represented by the blue Kijun line, which runs at 108.63. Resistance is located in the area of 109.10-109.20, where the 50 MA and the red Tenkan line are located. I assume that a break of 50 MA and Tenkan will facilitate the exit up from the Ichimoku cloud. However, if the bears manage to push the Kijun line, the pair is likely to continue moving in a southerly direction. At least to the price zone of 107.90-107.70, where the black 89 exponential and the lower border of the cloud are located. Moving on to the trading recommendations, judging by the two charts considered, they do not have a clear outline. I suggest that we take a wait-and-see position and stay out of the market for now. Let's see how the new five-day trading starts, and tomorrow, taking into account the technical picture, we will look for technically sound options for opening positions at smaller time intervals.