(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.)
6/18/2009 € EUR/JPY € Price action on EUR/JPY, a daily chart of which is shown, has just bounced up off the bottom support trendline of a parallel uptrend channel extending from late April. This represents the third support touch within this channel, with two resistance touches on the top thus far. The current bounce within this channel corresponds approximately with a bounce up off a downtrend line that was broken out in late May, the previous resistance trendline having become a new support line after breakout. Currently, price is also at a critical resistance juncture, around the 134.80 region. A breakout above this level, which would lend strength to a continuation of the current uptrend, could carry the bullish momentum eventually to target resistance around the last high in the uptrend, just above 139.00. In the event of any breakdown below the current uptrend channel, immediate further support resides in the key 131.00 support/resistance region.
James Chen, CMT
Chief Technical Strategist
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