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USD/JPY Signaling Hesitation

The USD/JPY rally continued last week, but retreated as soon as it made a new high on the month at 123.75. We see a bearish divergence in both the 4H and daily chart, signaling hesitation by the bull market. 

USD/JPY 4H Chart 11/21

(click to enlarge)

The 4H chart also shows that price appears to be cracking a rising short-term trendline. This suggests that we might have a short-term bearish correction. 

121.50 is a viable target for a bearish correction. This is a previous resistance pivot. A slightly more aggressive bearish correction can push to 120.50, a support/resistance pivot throughout the year. 

USD/JPY Daily Chart 11/21

(click to enlarge)

As long as the market holds above 120, there should be upside risk. Otherwise, the market is likely still in a sideways mode. In the bullish mode, the target is the 125.85 high on the year, with risk of continuing higher in-line with the prevailing secular bull market.