Technical outlook:
USD/JPY rose to the 135.47 high during early Asia Session on Wednesday before hitting potential resistance. The currency pair slipped lower towards 135.00 at this point of writing and is expected to break below 133.60 in the near term. On the flip side, yet another high could be print above 135.47, but it would be quite shallow.
USD/JPY needs to break below 133.40-50 to confirm a potential top in place and that bears are back in control. The currency pair should target the 126.36 initial support on the daily chart to confirm a potential trend reversal. Prices will also break below the trend line supportentering into the sell zone after breaking below 126.36.
USD/JPY has been constantly producing a bearish divergence on the daily RSI from the last few swing highs. A strong divergence is seen yet again as the price rallied through 135.47, indicating a potential rend reversal. The entire larger degree between 102.00 and 135.47 needs to be retraced before the rally continues.
Trading plan:
Potential drop through 126.00 against 136.00
Good luck!
