The Japanese yen fell more than 10% against the US dollar in the second quarter as USD / JPY bulls pressed higher with almost relentless vigor. USD / JPY broke its 2015 high in April as prices rose 6.72%. The 2002 high then broke in June, putting prices in 1998 territory.
USD / JPY Bulls on 1998 High
That year’s high of 147.65 marks the next major technical hurdle for USD / JPY. That’s less than 8% of where prices were at the end of June. Considering the recent rate of gains in the currency pair, this level can be tested briefly. A break higher would put prices at the highest in more than 30 years. The 1990 high at 160.16 would then feature bulls with their next key target.
Monthly Chart of USD / JPY
Diagram created with TradingView
Can prices support such a bun accumulation? The Relative Strength Index (RSI) suggests that the answer is “yes”. RSI rose to a record in the monthly time frame, breaking above levels set in late 2014 and neutralizing the possibility for a negative divergence (at least for now).
Looking at it differently, however, it is noteworthy that the MACD oscillator is struggling to reach 2015 levels, despite still rising strongly. Here, the higher in prices coincides with a lower high on the indicator, revealing a negative divergence. That can be a bearish sign. If prices fail to last above the 2002 high through the start of Q3, a recovery from the rapid rise above Q2 may be possible. If so, the 200-day Simple Moving Average could offer bears an attractive target.