(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.)
4/22/2009 € USD/JPY € Price action on USD/JPY, a daily chart of which is shown, has descended all the way down almost precisely to a key uptrend support line extending up from the second test of the 87.00 double bottom back in late January. This places the pair at an important juncture. If this uptrend line holds its dynamic support, bulls will look to push the pair up towards the 100.00 level once again, in the process breaking out above the short-term downtrend resistance line extending from the recent 101.43 high. A breakout above this short-term downtrend resistance line should confirm a bonafide uptrend bounce. In this event, price should target a retest of the 101.43 high. Any major violation to the downside of the current uptrend support line should reach further down towards key support in the 96.00 price region.
James Chen, CMT
Chief Technical Strategist
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