USD/JPY Technical Analysis: Sustained break above 112.00 remains elusive, 4H RSI diverges in favor of bears

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USD/JPY is struggling to find acceptance above 112.00 for the sixth consecutive day with the 4-hour chart relative strength index creating lower highs (bearish divergence). 

As of writing, the spot is currently trading at 111.93, having hit a year-to-date high of 112.17 yesterday. 

The news crossed the wires a few minutes before press time that Japan may delay the sales tax hike, due in October. So far, however, that has failed to move the needle on USD/JPY. 

4-hour chart

  • The repeated failure to find acceptance above 112.00 validates the case for pullback put forward by the RSI’s bearish divergence. 
  • As a result, the spot could drift lower to the 50-candle moving average, currently flatlined at 111.63. The bearish case would weaken if the spot finds acceptance above 112.00.

Trend: Minor pullback likely

 

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