(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; 50-period simple moving average in light blue.)
10/01/2009 - USD/JPY - Price action on USD/JPY, a daily chart of which is shown, continues in its bearishness despite having earlier in the week bounced up off a new 8-month low around 88.20 with a clear hammer candle. This hammer candle descended all the way down to the bottom border of a rough parallel downtrend channel (it is rough because there was a false break to the upside in early August), before making a bounce. Currently, price continues to lean towards a bearish bias. Within the current prevailing downtrend, the general 92.00 price region serves as strong resistance, and any breakdown below 88.20, the noted downtrend low, should quickly target major long-term support in the 87.00 price region.
James Chen, CMT
Chief Technical Strategist
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