USDJPY is trading near its highs at 106.66. Trend remains bullish as price continues making higher highs and higher lows. Price is very close to the upper channel boundary and the RSI did not make new highs as price did. This has produced another bearish divergence.
Red line - bearish divergence
USDJPY is expected to turn lower from current levels. The second lower high in the RSI despite the second higher high in price is a warning sign. A reversal in price below 106.37 will be the first sign of a top in place. At current price levels after such a rise in USDJPY, I prefer to be neutral if not bearish. Another pull back towards the lower channel boundary is expected if not lower.
