(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; downtrend lines in red; chart patterns in yellow; Fibonacci retracements in grey; 100-period simple moving average in light blue.)
3/11/2008 â€“ USD/JPY â€“ Much like other dollar-based currency pairs, the USD/JPY has been displaying what appears to be a tentative exhaustion in the most recent dollar plummet. In the case of the USD/JPY daily chart, as shown, price action has just bounced up off a critical point at the bottom of the prevailing downtrend channel in the last couple of days. This relatively clean bounce may be regarded as the beginning of a possible correction in the freefall that has occurred within the last two weeks, and it comes at a very appropriate time from a technical perspective. The fact that price has just hit solid support at the lower end of the long-term downtrend channel, as mentioned, hints at an exhaustion in downward momentum. Supporting this outlook are oscillators like the displayed Stochastics, which are deep in oversold and pointing back up. If price continues to follow-through on a climb back up, the next major resistance level to the upside resides around the last swing low in the 105.00 region.
Chief Technical Analyst
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