(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; 50-period simple moving average in light blue.)
4/15/2009 € USD/JPY € Price action as of Wednesday (4/15/2009) on USD/JPY, a daily chart of which is shown, descended all the way down to a key uptrend support line just above 98.00 before making a pronounced bounce back up. This uptrend support line extends from the second test of the 87.00 double-bottom, which occurred in January, and essentially defines the uptrend that has been in place since price surpassed the double-bottom peak around 94.60. By correcting back to the current uptrend support line and bouncing up off it, price has reached a critical juncture. Any continuation of the uptrend would necessitate a breakout above the last swing high in the uptrend, around 101.40. If this occurs, price could quickly work its way up to further resistance in the 103.00 region. To the downside, any significant breakdown below the current uptrend support line could target the key 96.00 support/resistance region.
James Chen, CMT
Chief Technical Strategist
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