The USD/JPY RSI Divergence Is Deepening

Although the USD/JPY pair did not reach the expected limit of the RSI divergence>>>  and continued climbing, said divergence not only remained but it also deepened. We can also see divergences on the 1-hour time frame – there are three for the past three highs alone, as you can see on the screenshot (in practice there are a lot more since the last RSI high that formed on 14.11.2016).

The pair formed two spinning top bars in the resistance zone around 109.50 on the 1-hour time frame, and when such bars appear at a resistance or a support level they are usually a signal for a reversal.

Despite all that the bulls remained in power and the pair moved to the upside with another 24 pips in the next two hours. At that stage the bulls could not remain in control and the next bar was controlled by the bears, engulfing the last two bullish ones.

The RSI divergence remained, signaling for a corrective move to the downside the limit of which is at 107.00 should it occur.

Now it remains to be seen whether this divergence will have the expected result or the pair will make another attempt to reach 110.00 before it begins a more serious correction to the downside.