(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend lines in red; Fibonacci retracement levels in grey; 200-period simple moving average in light blue.)
2/15/2008 â€“ NZD/JPY â€“ As of this writing, price on the NZD/JPY daily chart, as shown, has finally reached the top of a very important downtrend channel (represented on the chart by the parallel red lines). This down-channel resistance also coincides with resistance from a major uptrend line (represented on the chart by the middle green line). With this significant combined resistance, the technicals are hinting at an impending downward bias. Oscillators are lending some confirmation to this view, as the displayed Stochastics are emerging downwards from two weeks of being severely overbought. Barring any fundamentally-driven breakout to the upside, an expected bearish move should target initial support at the 38.2% Fibonacci retracement level around 83.00 (the low-to-high retracement span being measured from the swing low on 1/22/2008 to the last swing high on 2/14/2008), and then ultimately towards the bottom of the downtrend channel.
Chief Technical Analyst
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