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Fan Yang

USD/JPY Rally Might be Cut Short

Recently, we have been following $USDJPY as it made a bullish reversal swing. While there were some very short-term bullish momentum, we did note that the overall trend is bearish, and that we should monitor USD/JPY for resistance around 108-108.15we should monitor USD/JPY for resistance around 108-108.15.

USD/JPY Daily Chart

(click to enlarge)

108-108.15:
- The chart above probably doesn't show it, but looking back a little more, we can see that 108-108.15 has been a key support/resistance pivot. This is why we were anticipating resistance here.
- Also, we noted that if the prevailing downtrend is still in play, the daily RSI should hold under 60. 
- It looks like price found resistance before getting to 108, and the RSI is turning down before pushing to 60. 
- The 4/16 session candle is a bearish engulfing candle and also suggests the market is tentative on USD/JPY and might short it before it gets back to 108. 
- A break below 106.60 might open up a bearish push back towards the key support pivot around 105.50-105.75.