- The USD/JPY pair could witness a minor pullback to 111.30, courtesy of the bearish divergence of the relative strength index (RSI), seen in the hourly chart. A break below that level could be seen if Italy’s fiscal concerns trigger risk aversion in the European equity markets.
- The overall outlook remains bullish as indicated by the ascending 5-day and 10-day moving averages, and yesterday’s bullish outside day candle. Further, the monthly chart is flashing a pennant breakout.
Hourly Chart
Spot Rate: 113.53
Daily High: 113.63
Daily Low: 113.33
Trend: Temporary pullback likely
R1: 113.75 (December 2017 high)
R2: 114.74 (November 2017 high)
R3: 115.00 (psychological level)
Support
S1: 113.33 (session low)
S2: 112.68 (10-day moving average)
S3: 112.56 (previous day’s low)