Technical outlook:
USDJPY continues to defy resistance as it prints fresh swing highs close to 125.70 mark on Monday. The rally continues without any major correction as the currency pair approaches strong resistance around 125.85 (June 2015). Bulls might be poised to take that out but traders will remain cautious as potential for a turn remains high.
USDJPY has carved a meaningful support around 121.30 levels as seen on the chart. A break below 121.30 will confirm that a meaningful top is in place and the currency pair is good to be sold on rallies thereafter. Please also note that a reversal could be extremely swift from here as the RSI is still indicating a bearish divergence on the chart here.
Traders might be preparing to sell but current level is too early for a confirmation. Please allow USDJPY to break below 121.30 initial support and confirm a top before initiating short positions. Though prices have reached fresh swing highs, the currency pair remains at a risk of a meaningful bearish reversal soon.
Trading plan:
Preparing for a potential bearish reversal soon.
Good luck!
