USD/JPY Technical Analysis: Positive RSI divergence on 1H chart, IMF says too early to normalize mon pol in Japan
|- The USD/JPY's recovery from 111.83 to 112.35 has confirmed a bullish divergence of the relative strength index (RSI) on the hourly chart.
- The S&P 500 futures are up 0.9 percent at the time of writing, meaning the equity markets will likely regain poise on the last trading day of the week.
- The International Monetary Fund (IMF) said earlier today that the BOJ will take a long time to achieve its 2 percent inflation target, reinforcing the view that the Japanese central bank is unlikely to normalize its policy any time soon.
- All this indicates scope for a strong corrective rally in the USD/JPY to 112.75 (trendline hurdle on the hourly chart).
Hourly Chart
Spot Rate: 112.35
Daily High: 112.41
Daily Low: 112.00
Trend: Bullish
Resistance
R1: 112.75 (trendline resistance on the hourly chart)
R2: 112.87 (39.2% Fib R of 114.55/111.83)
R3: 113.00 (psychological level)
Support
S1: 112.13 (50-day exponential moving average)
S2: 111.83 (previous day's low)
S3: 111.40 (100-day exponential moving average)
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