(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.)
6/03/2008 – EUR/JPY – Strong resistance on the EUR/JPY daily chart, as shown, has exerted repeated downward price pressure on the pair since the multi-year high was hit in July 2007. This highly significant downtrend resistance line is represented on the chart by the long red line. As of the most recent touch of this line just last week, at least six touches have occurred since July 2007. Therefore, from purely a technical perspective, there currently appears to be a bearish directional bias for the short-term foreseeable future. In the event of a further move down off resistance, initial support to the downside resides in the region of a significant support/resistance level around 158.60. Oscillators like the displayed Stochastics are lending strength to this outlook of continued downward momentum, as they are pointing directly down after having just emerged from overbought.
Chief Technical Analyst
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