Red lines- bearish divergence

Blue line- major resistance trend line

USDJPY remains in a long-term up trend since beginning of 2021. Price continues making higher highs and higher lows. In our previous analysis we posted a warning for USDJPY bulls. Despite the bullish long-term inverted head and shoulders break out, in the near term we see USDJPY moving lower as a counter trend pull back, part of the bigger up trend. Last week USDJPY ended above 135 near 135.20. A low around 134.30 was formed and this is now a key support level. Price is vulnerable to a move lower. A break below 134.30 will be a sign of weakness and could be the starting signal of a bigger pull back. Bulls need to be cautious as the chances of this happening have increased.