(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.)
5/07/2009 € USD/JPY € Price action on USD/JPY, a daily chart of which is shown, has once again made a run at the area just under the key 100.00 level, before being rejected by the strong resistance imposed by that level. If price is ultimately unable to breakout above this region, the clear downside target resides around the major 96.00 support level. Like other major currency pairs, USD/JPY is currently experiencing somewhat of a tight consolidation representing directional indecision. With the top of the consolidation just under 100.00 (around 99.70) and the bottom around 98.00, a break on either side should prove to be critical for this pair. As mentioned, a downside break could target 96.00, in which case it would create the possibility of a rough head-and-shoulder formation. Any strong upside break should target the 101.43 level, which represents the level of the last major swing high.
James Chen, CMT
Chief Technical Strategist
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