The USD/JPY RSI Divergence Remains Valid Despite The New Low

Although USD/JPY formed a new, lower low at 111.986, it is obvious that the zone around 112.50 – 112.00 remains a very strong support and that the bulls and bears are struggling within it.

At the moment neither can win, so the pair remains undecided and it would be difficult to say what direction it will choose.

Still, we should not forget the fact that despite the new low the RSI divergence remains valid on both the daily and H4 time frames. The last bar that closed on the latter is strongly bullish, which, together with the valid RSI divergence, should be an incentive to remain vigilant and not to overlook a possible move to the upside.

In case the bulls do take control and the pair starts rising, the possible move to the upside could be toward 115.70 – 116.00.

The target to the downside is around 110.50 – 110.00.