USD/JPY (daily chart) as of December 18, 2012, has stalled around the key 84.00 resistance level after having broken out above the consolidation bordered by the 82.80 level just last week. After breaking out above 81.75 in late November, price consolidated into a flag-like pattern with its lower border around 81.75 and its upper border around 82.80. The breakout of the flag above 82.80 last week has brought price up to re-test and fluctuate around the key 84.00 level, which was last hit in mid-March. If the pair continues its stair-step uptrend as it has for the last 2-3 month of 2012, price action could see further highs for the pair, including potential resistance around the 85.50 and then 88.00 levels. To the downside, a bearish correction could see strong potential support around the key 81.75 level once again, a breakdown below which could find further potential support around the important 80.50 level.
James Chen, CMT
Chief Technical Strategist
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