(MENAFN- DailyFX) USD/JPY Bulls Set Sights on 1998 High
That year's high of 147.65 marks the next major technical obstacle for USD/JPY. That is less than 8% from where prices were in late June. Given the recent pace of gains in the currency pair, that level may be tested in short order. A break higher would put prices at their highest in over 30 years. The 1990 high at 160.16 would then present bulls with their next key objective.
USD/JPY Monthly Chart
Chart created with TradingView
Can prices sustain such a blistering rally? The Relative Strength Index (RSI) suggests that the answer is“yes.” RSI rose to a record high on the monthly timeframe, breaking above levels set in late 2014 and neutralizing the possibility for negative divergence (at least for now).
Looked at it another way however, it is noteworthy that the MACD oscillator is struggling to reach 2015 levels, despite still rising strongly. Here, the higher high in prices coincides with a lower high on the indicator, revealing negative divergence. That may be a bearish sign. Should prices fail to sustain above the 2002 high through the start of Q3, a rewind of the rapid rise over Q2 may be possible. If so, the 200-day Simple Moving Average could offer bears an enticing target.
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