FX.co ★ USDJPY approaches key support

USDJPY after making a new high around 111.65 has turned lower towards 110.50 as expected. When price was making new highs we warned bulls that price was vulnerable to a pull back as the RSI was giving us an important bearish divergence signal.

Red line- bearish divergence

USDJPY remains technically in a bullish trend making higher highs and higher lows. As long as price is above the blue support trend line bulls remain in control of the trend. Price is now approaching the support trend line at 110.40. So far in the past whenever price reached this support trend line, a new upward move followed. Will this happen again? We remain bullish as long as price does not break below the blue trend line.