(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.)
5/10/2010 - USD/JPY - Price action on USD/JPY, a daily chart of which is shown, dropped around 600 pips down to key 88.00 support on Thursday (5/06/2010) of last week, but quickly recovered a portion of its losses the very next day. Beginning the new trading week after last week's short-lived plummet, price action continues to recover much of last week's one-day losses. Although last week was characterized by a wild swing to the downside, the technicals could begin to re-emerge this week. To the upside, the key price level to watch continues to be in the 95.00 region. A strong break to the upside above this level should mean a resumption of the bullishness that prevailed before last week's dramatic fall. In the event that 95.00 is broken significantly to the upside, price could then potentially target further key upside resistance in the 98.00 price region, thereby potentially continuing the previously prevailing uptrend.
James Chen, CMTChief Technical StrategistFX Solutions
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