USDJPY remains in a bullish trend making higher highs and higher lows. Recently price challenged the lower channel boundary and then we mentioned that this was the time to get bullish again as price was very close to key support. Since then price rose more than 100pips to new short-term highs.

Red line - bearish divergence

However as one can clearly see in the 4 hour chart we have our first warning for the bullish trend. The RSI is not making higher highs as price does. This bearish divergence is an important warning that should not be taken lightly. Upside target is the upper channel boundary at 106.70 area. Short-term support is at 105.25 and at 105.85. Bulls need to be cautious.