Technical analysis of USD/JPY for August 4, 2017

There are important bullish divergence signs in the short- and medium-term. A downward sloping wedge pattern also suggests that soon the downward move from 112.15 will be over and a bounce will come with 111 as first target and 112 as next.

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Short-term resistance is at 110.50 and support at 109.60. The trend remains bearish as the price is making lower lows and lower highs. Price is also below both the tenkan- and kijun-sen.

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The bearish divergence in the daily chart implies that if a bounce starts now, we should expect the price to move towards 111.6-112. I do not expect the USDJPU to move past below 109 so, currently, the risk reward favors the upside.The material has been provided by InstaForex Company - www.instaforex.com