VOT Research Desk
The bullish momentum may continue to wane as the Relative Strength Index (RSI) retreats from overbought area to show a classic sell signal. USD/JPY gives back the advance from the beginning of the month among the unsuccessful attempts to finish above the 144.10 (100% expansion) regions.
As was the case earlier this year, a push down 70 in the RSI is expected to be accompanied by a further decline in the USD/JPY, with a closure below 141.70 (161.8% expansion) putting the 140.30 (78.6% expansion) zone back on the map.
If USD/JPY is unable to hold the monthly low (138.84), it may return to the 137.40 (61.8% expansion) to 137.80 (316.8% expansion) range. However, if it is able to stay above the moving average (137.10), the exchange rate may continue to follow the positive slope in the 50-Day SMA.
