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.
- 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