(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; chart patterns in white; 50-period simple moving average in light blue.)
2/19/2009 – USD/JPY – Price action on USD/JPY, a daily chart of which is shown, has risen substantially up to key resistance in the 94.50 region. This occurs after price reversed from the 2nd test of the lows around 87.00, and then broke out above a triangle consolidation near those lows. After the triangle break, price pulled back to the apex of the triangle before ascending steeply up to the current key resistance level. This level is especially significant because it represents the peak in a potential double-bottom reversal pattern. Therefore, any strong breakout and close above the 94.50 region, with bullish follow-through, could confirm a double-bottom formation. In this event, the next resistance to the upside resides around the 96.00 price region. In the event that the current resistance is respected, major support resides around the significant 91.00 support/resistance region.
James Chen, CMT
Chief Technical Strategist
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