width=398(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.)

1/22/2010 - EUR/JPY - Price action on EUR/JPY, a daily chart of which is shown, has descended all the way down to reach and dip below key support around the 127.00 price region. This occurs within the context of a prolonged sideways trading range that the pair has been entrenched in since at least mid-2009. Currently, bearishness in the euro against the yen has been a prevailing theme for more than a week. In the process, price has just hit a fresh 9-month low with even further bearishness likely. A strong breakdown and daily close significantly below the noted support around 127.00 could potentially indicate additional bearish pressure targeting further downside support targets. A key longer-term bearish target resides around the 122.00 price region. In the event that the sideways trading range remains intact with a bounce up off support, a key upside resistance target within the trading range resides around the 131.50 price region.

James Chen, CMT
Chief Technical Strategist
FX Solutions

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