Blue line- bullish divergence

Red lines- bearish channel

Following our previous analysis using wave theory, USDJPY is finally unfolding its fifth wave what we believe is most probably the last part of the decline from the 151.96 top. USDJPY is trading still inside a downward sloping channel. The new lower low in price today has not been followed by a new lower low in the RSI. Technically trend remains bearish as price continues making lower lows and lower highs. Resistance by the channel is at 137 and only a break above this level could be seen as a reversal signal. The RSI has provided us with a bullish divergence. This is an important warning for bears. USDJPY could continue lower towards 131-130, but we believe that the downside is now limited. We are in the final stages of the fifth wave. Bears should protect their profits.