Wednesday, November 29, 2017

USD/JPY Is Renewing Its Rally

The RSI indicator on the USD/JPY H4 time frame made an important breakout above divergence resistance trend line (in red) that has been formed from 23rd October 2017 to 6th November 2017, the continuation of which has been tested many times up until the breakout.

The RSI indicator however could now break out below the second trend line of the divergence (in blue) and during this whole time it developed between the two lines.

Since the moment of the breakout it was clear that the pair would start rallying and anyone who knows the RSI indicator and its signal has probably already made use of it.

What can we expect from now on?

In my opinion, the pair will renew its rally and the first serious resistance to the upside is around 112.70 – 112.80. If there is a successful breakout above that resistance we could expect the rally to continue to 113.20.