(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; uptrend lines in green; chart patterns in magenta; 50-period simple moving average in light blue.)

2/06/2009 – USD/JPY – Bullish price action on USD/JPY (a daily chart of which is shown) has just broken cleanly out of a prolonged triangle consolidation near the double-tested 13-year lows. This triangle breakout has also gone on to break a key support/resistance level in the 91.00 region. With any continued bullish momentum above 92.00, price should target the 94.60 resistance to the upside, which represents the peak in the tentative double-bottom formation. A price breakout above that level should confirm a potential double-bottom reversal in the pair. In this event, a further key resistance target resides around 96.00. To the downside, the broken 91.00 level should now serve as some support where it previously served as resistance.

James Chen, CMT
Chief Technical Strategist
FX Solutions

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