Red line -resistance trend line (broken)
Blue lines- Bullish RSI divergence
In our previous posts regarding USDJPY we talked about a final decline to complete the wave pattern and the 5th subwave of wave 5. We also mentioned the warning signs from the RSI and the increased chances of a reversal as the down trend was weakening. Our downside target has been met as price bottomed between 129 and 130 as expected. USDJPY is breaking above the important trend line resistance today. This is an important win for bulls as price was trading below this trend line for more than 3 months. The Daily RSI bullish divergence seems to be on time with the reversal. USDJPY has the potential to move even higher towards 138. Support is found at 131-130. As long as price is above this level we expect USDJPY to continue higher. Next important resistance is at 134.51. A break above this level will confirm that a trend reversal is under way.
