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USDJPY overextended in all time frames

USDJPY Tech analysis by Simon Kazinsky on 20:18 December 07, 2014 EST

USDJPY broke above 120 last week. The Japanese yen has now devalued around 50% since 2012 against the US dollar and very substantially against all other major currencies.

The chart shows price divergence against its supporting moving average at a extreme level and the RSI (relative strength index) indicator at the top end of its band.

Retail traders are now net neutral on this pair.

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On a longer time frame the weekly chart shows extreme divergence against its supporting moving averages too.

With all this into account my bias remains the same, USDJPY is in a rising cycle but it is overbought in the short/medium term and a correction back to its supporting moving averages is very likely.