FX.co ★ Technical analysis of USD/JPY for October 31, 2016

The trend in USD/JPY remains bullish but very choppy. Price is making higher highs and higher lows but I expect a trend reversal here to the downside. There are important divergence signals implying that the uptrend is fragile and could reverse at any time.

Blue lines - bullish channel

Blue line - divergence signal

USD/JPY is trading above the Ichimoku cloud on the 4-hour chart and inside the blue bullish channel. The RSI is providing us with a bearish divergence signal that is a big warning for bulls. A break below the Ichimoku cloud and the lower channel boundary will be a sell signal and trend change confirmation.

On a weekly basis the USDJPY is trading very close to important weekly resistance of the kijun-sen (yellow line indicator). This is important resistance area. Support is at 102.80. Short-term support is at 103.80. Resistance is at 105.50.