USD/JPY technical analysis: Flashing red, but bounce likely in next 24 hours

USD/JPY created doji candle on Wednesday.
The 4-hour chart shows a bullish divergence of RSI.

Omkar Godbole FXStreet Contributor

USD/JPY is currently trading at 0.16% on the day at 109.42, but may soon pick up a bid and rise toward 110.00 over the next 24 hours as technical charts are flashing signs of seller exhaustion.

To start with, the pair created a classic long-legged doji candle on Wednesday, a sign of indecision among the sellers. After all, the candle has appeared following a sell-off from 112.40 to 109.02.

Further, on the 4-hour chart, the relative strength index (RSI) has diverged in favor of the bulls.

As a result, a corrective bounce to 10-day moving average, currently at 109.98 looks likely.

Daily chart

4-hour chart

Trend: Bullish

Pivot points

1. R3 110.37
2. R2 110.04
3. R1 109.82
PP 109.49
1. S1 109.26
2. S2 108.93
3. S3 108.71

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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