USD/JPY Technical Analysis: Preparing to Reverse Downward?
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- USD/JPY Technical Strategy: Flat
- Support: 116.96, 115.71, 113.70
- Resistance: 119.24, 120.48, 122.49
The US Dollar may be carving out a double top against the Japanese Yen as negative RSI divergence warns of ebbing upside momentum. A daily close below the 14.6% Fibonacci retracement at 116.96 exposes the 23.6% level at 115.71. Alternatively, a reversal above channel floor support-turned-resistance at 118.09 clears the way for a test of the 50% Fib expansion at 119.05.
RSI divergence is not a sufficient trade signal in its own right and further confirmation is needed before an actionable selling opportunity emerges. With that in mind, we will continue to monitor developments from the sidelines for the time being.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.