Wednesday, October 26, 2016
There’s a Divergence and a Hammer Bar on the Daily USD/JPY Chart
Apart from these two signals for a potential end of the move to the upside at this stage we can also see that the USD/JPY pair has formed a new high which has reached the resistance trendline (in blue) of the price channel that has formed on the weekly time frame since 16th August 2016.
As I already mentioned, we can also see that that there is a divergence on the RSI indicator on the daily time frame between the last three highs, which is a signal that there will be a reversal.
On the one-hour time frame the pair is forming a range between 104.147 and 104.365 and after a breakout we can expect a move in the direction of the breakout for about 21 pips. Even if that move is to the upside, the daily time frame is indicative that there is an impending correction to the downside, the first target of which is around 103.50.