USD/JPY (daily chart) as of November 6, 2012 has tentatively turned to the downside after bumping up against key resistance around the 80.50 level late last week. This respect of the 80.50 level, which is one of the more important support/resistance levels for USD/JPY, established a new 4-month high for the pair and coincided with the 50% Fibonacci retracement of the last major bearish run from the March 84.00 area high to the September 77.00 area low. If price is able to stay significantly below the key 80.50 level and 50% retracement, any continued move to the downside off the current bearish turn could move towards an end to the bullish correction that has been in place since mid-September, and a potential move towards a retest of the important 78.00 level. In the event of a breakout above 80.50 on an extension of the current bullish correction, further potential resistance to the upside resides around the 82.00 price region.
James Chen, CMT
Chief Technical Strategist
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