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  • 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

Resistance

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)