Technical outlook:
USDJPY climbed above fresh swing highs at around 136.70 on Tuesday before finding resistance. The currency pair is seen to be trading close to 136.15 at this point in writing and is expected to continue sliding through the 131.50 initial support in the near term. Bears need to hold prices below the 136.70 mark to keep the structure intact.
USDJPY has again denied resistance, pushing prices close to 136.70 continuing its religious uptrend. The currency has carved a meaningful larger degree upswing between 102.00 and 136.70 now, which needs to be retraced before the next leg higher resumes. A break below 131.50 is the minimum requirement to confirm a potential top in place.
USDJPY has produced a strong bearish divergence on 4H RSI as seen on the chart here. Please also note that bearish divergence is reflected on multiple timeframes, which is a potential indicator of a trend reversal. Aggressive traders might initiate fresh short positions around current levels with risk above the 137.00 mark.
Trading plan:
Potential drop through 131.50 against 137.50
Good luck!
