Blue lines- bearish RSI divergence
USDJPY is trading at new highs around 148.90. Trend remains bullish as price continues making higher highs and higher lows. However the RSI has provided us with an important warning in the Daily chart. The RSI is forming lower highs providing us with a bearish divergence. This is not a reversal signal. This is a warning to bulls. The bearish RSI divergence suggests that the up trend is weakening. We believe that the upside potential in USDJPY is limited. The chances for at least a pull back have increased. Short-term support is found at 147.30. A break below this level will be an important reversal signal. Our first pull back target is at 146.35.
