(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; downtrend line in red; 50-period simple moving average in light blue.)
3/13/2008 â€“ CAD/JPY â€“ The CAD/JPY cross has just reached a critical support/resistance level as shown on the accompanying daily chart. The slightly down-angled trendline, represented on the chart by the long red line, has held its validity since at least mid-2006. Originally acting as downtrend resistance, this line transformed into a significant support level after the line was broken to the upside in April 2007. After this break, price respected the line as support two more times before hitting the line a third time early today (3/13/2008). At this critical juncture as of this writing, support appears to be holding, with oscillators like the displayed Stochastics supporting a turn up from oversold. If this indeed occurs, the next resistance to the upside resides around the 103.00 region. But as we have seen in the last several days with the major USD pairs, calling definitive turns can be a tough business. In the event of a true breakdown of this support line, the next major near-term support to the downside resides in the 100.00 region.
Chief Technical Analyst
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