width=398(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.)

3/23/2010 - USD/JPY - Price action on USD/JPY, a daily chart of which is shown, has been in a trading range consolidation for around two weeks now. This consolidation has taken the form of a symmetrical triangle or pennant type of formation, which is essentially a converging consolidation, and occurs within the context of an overall long-term downtrend. A strong break of the chart pattern in either direction should have important consequences. A break to the upside would bring price up to approach the upper border of the overall parallel downtrend channel, potentially threatening the longstanding downtrend. A further breakout above the channel's top border could signify a change in trend, with an immediate upside resistance target in the 92.00 price region. A break to the downside of the current chart pattern would continue the overall downtrend, potentially targeting further key support in the 88.00 price region.

James Chen, CMT
Chief Technical Strategist
FX Solutions

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