USD/JPY Weekly Chart Analysis - Inching Toward a Bear ReversalUSD/JPY has refused to fall below the Weekly 9EMA since July 28th. However, we are inching closer to the previous high resistance of 152.000, so we should be cautious longing in the coming weeks. JPYX is also hovering around a support area in a descending wedge and has the potential to pullback to the upside, dragging USD/JPY down or at least, holding it back.
The RSI is also in overbought territory which is *never* a reason on its own to reverse your position bias. But when we couple the RSI level with the following items, a reversal into a minor pullback seems likely:
1. The previous high of 152.000 is near. Given it was the point of the last reversal, expect some selling at this level.
2. We have had 12 consecutive candles above the 9EMA on the Weekly, we should expect a fall below the 9EMA in the next couple of weeks given how close the 152.000 resistance is.
3. JPYX is bouncing on the descending wedge and has probable potential to reverse to the upside, which would stall or drag USD/JPY down.
4. The Weekly bull bars are weak. They appear to be losing strength as we get closer to 152.000.
5. RSI on USD/JPY is overbought, which is a weak signal but a signal that supports the prior data in this list.
At this moment, I would be zooming into the lower timeframes like the 15m and 1hr candles to look for good scalp entries and keep my position sizes a bit smaller than my maximum. The probability of reward over risk is lessening as we get closer to 152.000; be careful at this level.
As always, trade at your own risk and you are responsible for your trades. I hope this analysis was insightful and useful.
Trade wisely and let us know what you think in the comment section below!
