USD/JPY Technical Analysis: Upward Momentum Ebbing?
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- USD/JPY Technical Strategy: Flat
- Support: 116.30, 115.37, 113.85
- Resistance: 117.82, 119.05, 120.27
The US Dollar may be vulnerable to a correction downward against the Japanese Yen as negative RSI divergence points to fading upward momentum. Near-term support is at 116.30, the 23.6% Fibonacci expansion, with a break below that on a daily closing basis exposing the 14.6% level at 115.37. Alternatively, a push above the 38.2% Fib at 117.82 opens the door for a test of the 50% expansion at 119.05.
The mere presence of RSI divergence is insufficient to identify reversal without added confirmation. As such, we will continue to stand aside for now and wait for a more compelling setup to present itself before committing to a position.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com