USDJPY: Clear RSI Resistance at 67.31

USDJPY: Clear RSI Resistance at 67.31

The resistance on the Relative Strength Index here is interesting.  If you connect the price highs each time the Relative Strength Index hits the 67.31 area you get a perfect down trend line.  Connect that line to the first low and you have a perfect channel on a closing basis. 

On the Relative Strength Index lows there is no divergence at all here.  Each time price made a new low so did the RSI.  Divergence certainly is not required to make a bottom but it would be nice to see as it would give us more confidence that a bottom may be in at the 96.09 lows.   Now, there is divergence divergence between the 96.09 low and the previous days low but I am looking at the bigger picture.


Although I am looking at the move up from the 96.09 lows as a 5 Wave move up, I am not ready to jump on the long train yet.  I would like to see some kind of bullish signal out of the RSI to confirm the 5 Waves up from the 96.09 low.  This could happen in two ways: 1.  The RSI drops below the 23.415 low while price continues to close above the 96.06 low Creating a Positive Continuation Signal. 2. We get a close above 98.66 and the Relative Strength Index closes above 70.  These are the two things that would turn me bullish on this pair.

If the move up is NOT a 5 wave move up then I would like to see price test the bottom of the channel again while the RSI holds ABOVE the 22.413 low creating some divergence at the lows.

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Thanks

Bob

USDJPY 4 HR Relative Strength Index Chart

EURUSD: RSI Update - 1.3232 needs to hold!!!

EURUSD: RSI Update - 1.3232 needs to hold!!!

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Thanks

Bob

The set up here is basically the same as what we looked at on the GBPUSD earlier today.  A pullback here that continues to close above the 1.3232 while the Relative Strength Index makes a new low down toward the 30 line would create a Positive Continuation Signal.  We would then have to wait for the trigger and possibly get long for a ride up to highs above the June 18th high around 1.3440.

A close below 1.3232 and the 1-2 Elliott Wave count I posted here would be my top count.

EURUSD 4 HR Relative Strength Index Chart

GBPUSD: Another Positive Continuation Signal Coming Soon?

GBPUSD: Another Positive Continuation Signal Coming Soon?

The GBPUSD created a new closing high last week after the Relative Strength Index created a Positive Continuation Signal on Aug. 13.  This new high did create some bearish divergence between the RSI and price.  Because of this bearish divergence I am expecting at least a pull back here before another high happens later in the week.

I would like to see this pullback hold the 1.5436 lows and possibly the green trend line I have drawn.  I would also like to see the Relative Strength Index create a new low down toward the red trend line I have drawn on the RSI.  This would create another Positive Continuation Signal and increase the chances of another new high.  I would be willing to bet that this new high would create another divergence giving us a nice short entry near the top.    

The Elliott Wave Count I posted here on CurrencyWaves.com is another possibility this week and will also give us a great short play down the road.

GBPUSD 4 HR Relative Strength Index Chart