As we explained in our last USDJPY analysis trend remains bullish as price continues making higher highs and higher lows. Price is now approaching the first important resistance at 111 and continues to respect the key support trend line.
Support by the red trend line is found at 110. Holding above this level will be key for the continuation of this upward move. USDJPY price is making new higher highs relative to the high from March 2021, however the RSI is not following.
The RSI is providing us with a bearish divergence signal. This is a sign of a weakening trend. This is not a reversal sign. This is a warning. That is why traders will need to be very cautious and watch out for possible reversal signals by the price. One of them would be if price were to break below 110.
