(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend lines in red; 50-period simple moving average in light blue.)
5/15/2008 – USD/JPY – After a clean breakdown of the short-term uptrend line within the context of the long-term parallel downtrend channel on the USD/JPY daily chart, as shown, price has performed the beginnings of a classic pullback to the uptrend line. Of course, a true pullback and downward continuation would only be confirmed if and when price moves below the low point of the pullback (around 102.60). In the event that this confirmation occurs, the next major support to the downside resides around the 101.50 region, which is an important historical support/resistance level. If, on the other hand, this tentative pullback turns into a continued move back up above the uptrend line, strong resistance resides around the top resistance line of the long-term downtrend channel (in red).
Chief Technical Analyst
IMPORTANT NOTICE: These comments are for information purposes only. The information contained on this document does not constitute a solicitation to buy or sell by FX Solutions, LLC., and/or its affiliates, and is not to be available to individuals in a jurisdiction where such availability would be contrary to local regulation or law. Opinions, market data, and recommendations are subject to change at any time. Forex trading involves substantial risk of loss and is not suitable for all investors.