- USD/JPY’s early gains have been reversed by key trendline hurdle.
- The hourly chart bullish indicator divergence is still valid.
USD/JPY is trimming gains, having failed to take out the resistance of the trendline rising from Feb. 2 and Feb. 18 lows.
At press time, the trendline resistance is seen at 110.35 and the pair is trading largely unchanged on the day at 110.20.
The pair pulled back from session highs, as the anti-risk yen found bids possibly tracking the action in the US equity index futures. The S&P 500 futures, which were up more than 0.20% losses, had dropped into the red a few minutes ago.
The futures, however, seem to have again regained pose. Currently, they are reporting a 0.38% gain. As a result, the markets may offer yen, helping the USD/JPY rise back to session highs near 110.35.
Also, the bullish divergence of the hourly chart relative strength index (RSI) is still valid. So, a stronger bounce to levels above 110.35 cannot be ruled out. That would expose the 200-hour average lined up 110.64.
On the downside, a move below 109.89 would invalidate the bullish divergence and could cause more sellers to join the market, yielding a drop to the 50-day average at 109.64.