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

2/16/2009 – USD/JPY – Price action on USD/JPY, a daily chart of which is shown, has begun to form an uptrend support line extending from the second test of the 13-year lows (just above 87.00) hit in late January. This uptrend line should now serve as the dominant dynamic support for the pair, barring any dramatic yen-strengthening in the near-term. Currently also just above a key support/resistance level in the 91.00 region, price is very close to approaching the last swing high, in the 92.40 region. If the pair makes a substantial breakout above this level, the bullish momentum of the short-term uptrend could target further resistance in the 94.60 region.

James Chen, CMT
Chief Technical Strategist
FX Solutions

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