USDJPY continues to march higher this week and has already moved above 113.00. In our recent weeklies, we noted this area as a key resistance zone based on the upper end of the channel that has formed here since March/April this year.

Furthermore, a quick glance at the chart below shows us that 112.00 – 114.00 is a historically important area for USDJPY, where the price has peaked many times in the past 4-5 years. Could this be a sign that another peak is near? There is only one way to find out, and that’s letting the market tell us. In spite of the strong uptrend, another discouraging sign for adding longs here is the overbought weekly RSI (currently 72.30). I wouldn’t want to be long here!

Looking at support levels to the downside, the previous swing highs at the 112.00 and 111.00 round numbers are likely to be the first zones where buy orders may be located.