Red lines- bearish channel
green line- support trend line
USDJPY is very close to making new lows relative to the previous month as expected after the break of the short-term upward sloping green support trend line. Price remains trapped inside the medium-term bearish channel. As price is close to making new lower lows, the RSI looks like it is not going to make new lows and instead provide us with another bullish divergence. So far price action follows our wave analysis and our technical analysis. So far there is no sign of a reversal, only warnings of a weakening down trend. Current market conditions suggest that the downside is limited to a move towards 129 but upside potential is much bigger and the chances of a reversal are increasing.
