(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend lines in red; horizontal support/resistance lines in yellow; Fibonacci retracements in grey; chart pattern in magenta; 50-period simple moving average in light blue.)

1/06/2009 – USD/JPY – Coming into the New Year, price action on the key USD/JPY pair (a daily chart of which is shown) has made a very decisive break above a strong downtrend resistance line that has been in place since at least September 2008. In the process, the pair can now be considered to have tentatively entered into a new uptrend (or at least a major upside correction) after having double-tested an extreme multi-year low in the 87.00 region. Currently, price has reached a resistance level in the 94.50 region, and a bullish bias appears still to be prevailing. Further upside momentum with a strong break and close above this level could eventually target further resistance in the 97.50 region, which would lend substantial confirmation that the pair is indeed entrenched in a new uptrend, or at least a very significant upside correction.

James Chen
Chief Technical Strategist
FX Solutions

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