(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.)
4/17/2009 € EUR/JPY € Price action on EUR/JPY, a daily chart of which is shown, has made a substantial drop that has broken down below two key support levels. The first is the dynamic support offered by the bottom trendline of a parallel uptrend channel that has been in place for the last two months. The second is the key horizontal support/resistance level around 131.00, where price has turned multiple times in the past. After a significant breakdown below these two support factors, this pair continues to have a bearish bias, and further support to the downside currently resides around the 126.00 support/resistance price region. And any break below that key level could carry the bearish momentum eventually to target further major support around 122.00. To the upside, the 131.00 level should now serve as resistance where it previously acted as support.
James Chen, CMT
Chief Technical Strategist
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