The Dollar Could Turn Lower Versus the Yen

USD/JPY (¥115.835)

• Resistance Levels: 116.30, 117.80, 119.08
• Support Levels: 115.35, 113.80, 112.75

The U.S. Dollar is losing steam versus the Yen. Let’s look at the above daily MT 4 chart where we note ebbing momentum and a Harami candlestick at the current price level. Also note the RSI, where are seeing a negative divergence. These factors point to a possible short term top forming and a move lower. Or does it? Let’s discuss this further.

First some technical analysis:

Short term support is currently at 114.52, we need a daily close below this level to challenge 113.50 and lower. Should the Dollar push higher, we need to close above 116.30 in order for buyers to test 117.80 then 119.08/10 cluster zone.

Let’s look at some trading strategy. The Harami candlestick pattern, while a bearish reversal cue, is not strong enough on its own to signal a downturn. Even with the negative RSI convergence, we need further signals to the downside. There are also no clear bullish signals. With the absence of credible trading cues, I am opting to stand aside and wait until a better trading signal.

As always, trading strategies are solely educational and do not construe trading advice. Please do your own analysis.