The USD/JPY Move To The Downside Continues. The Divergence Has A Limit Below 106.00.

The USD continues losing ground to other currencies and keeps falling. Whether the reason for that are the controversies surrounding the Trump administration and the reaction to those controversies or it’s due to purely technical factors is a matter of debate. The fact is, the USD continues moving to the downside.

For the past two days alone USD/JPY has fallen with 262 pips from 114.948 to 112.077 and today it formed a new low at the latter level.

Although the pair has reached a strong support zone around 112.50 – 112.00, in my opinion, its stay in this zone will be short-lived and corrective, after which the move to the downside will continue. The pair’s next target is at 110.30 - 109.90, but I doubt that is the end of it.

The RSI divergence on the daily time frame that formed from 25th November 2011 (113.895) to 15th December 2016 (118.660), as you can see on the picture above, has a limit at 105.886.