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).

Omkar Godbole FXStreet Contributor

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)

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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