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Recently, it has often happened that the Japanese yen has been at odds with other major currencies against the US dollar. That is, if other allied currencies strengthened against the dollar, the yen declines and vice versa. This time, the Japanese yen showed solidarity and also ended trading on February 8-12 with an increase against the US dollar. This pair differs from the others in that both currencies, depending on the situation, are perceived by market participants as safe-haven assets. However, quite often, the main influence on the price dynamics of this instrument is provided by the technical picture, which we are going to consider right now.
Weekly
As you can see, following the results of the previous trades, a candle with a bearish body and a fairly long lower shadow appeared on the weekly chart. This factor does not allow us to make an unambiguous conclusion about the further direction of the quotes. Moreover, attempts to continue moving downside are limited by the blue Kijun line of the Ichimoku indicator, which acts as fairly strong support. So, in the last week's trading, the bears' attempts to pass the Kijun down on the instrument did not lead to anything. After reaching a strong technical level of 104.40, the pair gained support and began to actively recover. As a result, trading on February 8-12 ended at 104.94, which is slightly below the most important psychological level of 105.00. I believe that the inability of the bulls to close weekly trading above 105.00 indicates their weakness, but the long lower shadow of the last candle signals that the market does not want to decline or cannot do so yet.
At the same time, there are two specific points. First, under the Kijun line, at 104.18, there is a red Tenkan line, which can hedge and prevent the price to go lower. Second, in the case of an attempt to pass the resistance level of 105.77, the bulls for the pair may meet a strong obstacle in the form of a 50 simple moving average, which is quite able to provide strong resistance to attempts to move in the upside direction. However, the current weekly range in which USD/JPY is trading can be designated as 102.60-105.77, and since the pair is trading much closer to the upper limit of this range, an exit from it upward seems more likely.
Daily
On the daily chart, we see that after a rebound down from 105.77 and gaining strong support in the area of 104.40, the quotes show growth. In particular, after the opening of today's trading, the dollar/yen is confidently moving up, breaking through the orange 144 exponential moving average and the red Tenkan line. On this chart, the trading range in which the quotes are located is even narrower than on the weekly timeframe, and it can be designated as 104.40-105.77. Typically, the pair is now trading approximately in the middle of the designated range.
The recommendations for USD/JPY will be as follows: If a reversal pattern or Japanese candlestick patterns appear in the area of 105.70, this will be a signal for opening sales. In the case of a decline in the area of 104.50 and the appearance of bullish candle patterns there, we buy. In both cases, given the frequently changing market sentiment, I do not recommend setting large targets but will limit the profit to 30-40 points. This recommendation is dictated by the unclear technical picture and the further direction of this currency pair.
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