USDJPY has created fake breakout of the resistance 112.13 ins the background plus a bearish divergence, which are signs that buyers lost momentum and sellers started to distribute positions. We expect further downside.
Upward redline - major support trendline (broken)
White line – bearish divergence
Green rectangle – decision level support (broken)
USD/JPY is trading lower on the wings of fake breakout of resistance and bearish divergence. Most recently, the resistance at the price of 111.80 held successfully and bearish flag got created. The medium line (EMA) of the Keltner channel is acting like resistance and the bearish flag got even more power for potential drop.
Trading recommendation: We sold USDJPY from 111.58 with target at 110.87. Protective stop is placed at 111.95.
