USD/JPY Technical Analysis: Upside Follow-Through Uncertain
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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 hit another 7-year high against the Japanese Yen but negative RSI divergence warms of ebbing bullish momentum that may precede a reversal. A daily close below the 23.6% Fibonacci expansion at 116.30 exposes the 14.6% level at 115.37. Alternatively, a push above the 38.2% Fib at 117.82 clears the way for a challenge of the 50% expansion at 119.05.
RSI divergence is not a sufficient-enough indication of reversal by itself without further confirmation. With that in mind, we will remain on the sidelines for the time being until a more actionable opportunity to establish a short position presents itself.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com