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

2/03/2009 – EUR/JPY – Much like other Yen pairs, EUR/JPY (a daily chart of which is shown) is currently entrenched in a small triangle formation, or a converging consolidation near long-term lows. In the case of EUR/JPY, price is currently very close to major support around the pair’s 7-year lows, in the 112.00-113.00 region. A significant breakdown of this long-term support zone would coincide roughly with a breakdown of the triangle pattern, in which case price could eventually target major support to the downside around the 107.00 region. To the upside, any strong breakout above the top border of the triangle should target further resistance in the 122.00 region, a significant prior support/resistance level and the top point of the current triangle.

James Chen, CMT
Chief Technical Strategist
FX Solutions

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