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As already noted in today's articles on the euro/dollar and pound/dollar, at the auction on April 12-16, the US currency showed a weakening against all its main competitors. In this context, the Japanese yen was no exception, which rose by 0.75% against the US dollar last week. The most interesting thing is that such a lucrative nature of trading in the "American" has been seen for quite a long time. One week, the dollar is the undisputed favorite in the foreign exchange market, and the next, it acts like an outsider. To be honest, it is quite difficult to find a clear explanation for this factor. From the point of view of the foundation, the American economy demonstrates a fairly good and fast recovery rate from the consequences of the COVID-19 pandemic. But the technical picture for virtually all major pairs with the US dollar is not in favor of the US currency. I believe that this is the main reason for such negative dynamics, which was shown by "green" at the auction of the last five days. Well, let's understand, considering the price charts.
Weekly
The 110 yen per dollar mark has already been mentioned many times. This most important and very significant level for the market very often sets real traps for traders. The current situation was no exception when the pair rose almost a whole figure above 110.00. Under another important and strong level of 111.00, the pair met such strong resistance from sellers that it meekly submitted to the selling pressure and began to actively decline. However, in another strong technical zone of 109.00-108.60, the USD/JPY pair quite predictably found good support, and buyers began to hope that the exchange rate could again turn in the north direction and resume the upward trend. However, these hopes, at the time of writing, are not justified. The quote started trading this week with what ended the last five days, namely, a decline. Right now, there are attempts to break through the support at 108.60, but whether they will be successful will become clear only after the end of the current weekly trading.
Daily
Today, Japan received data on industrial production, which turned out to be better than experts' expectations. However, the main feature of this currency pair is its ultra-volatile reaction to important statistics and events from the United States. Nevertheless, today's strong reports on industrial production in Japan were not superfluous to strengthen the yen. As can be seen on the daily price chart, under the support level of 108.60, there is also support at 108.40, where the minimum trading values were shown on March 23. In order not to beat around the bush for a long time, I will immediately go to the trading recommendations for USD/JPY. Given the inability of the pair to gain a foothold above the most important level of 110.00 and a fairly strong subsequent decline, I assume that the dollar/yen will continue to implement a bearish scenario. In the case of a true breakdown of 108.40, the pair will head to the 50 blue simple moving average, which passes at 108.00. I believe that this will be the nearest target for sales, which I consider the main trading idea for USD/JPY, and I suggest considering after bounces to the price zone of 108.60-108.75. I recommend looking for sales at more attractive prices after the rise to the area of 109.00-109.15 As for purchases, I recommend refraining from them until the corresponding signals appear.
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