(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; downtrend line in red; 200-period simple moving average in light blue.)
5/27/2008 – EUR/JPY – Price on the EUR/JPY daily chart, as shown, is approaching a significant downtrend resistance level. This dynamic resistance is represented on the chart by the long red line. The strength and significance of this line has been reinforced by at least five touches since July of last year. On the impending approach of a sixth potential touch, the bias is towards a turn back down at or near the line to continue the medium-term downtrend. This bias is confirmed by oscillators like the displayed Stochastics, which have been in overbought territory and are pointing down. In the event of this move back down, the next major support to the downside resides in the region of 158.60, which comprises a significant previous support/resistance zone.
Chief Technical Analyst
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