(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.)
6/26/2009 € EUR/JPY € EUR/JPY, a daily chart of which is shown, has been consolidating right underneath the key 135.00 support/resistance level for the last week and a half, while still respecting a parallel uptrend channel that has been in place since late April. On a longer-term basis, a strong uptrend actually extends all the way back to the long-term extreme low hit in January. Currently, price has just made a bounce up off both the bottom of the parallel uptrend channel as well as a downtrend line (extending from the early April swing high) that price broke out above in late May. So the recent bearishness in this pair may be seen as corrective, with a good potential for more upside price action going forward. This bullishness should be triggered on any significant breakout above 135.00, which would confirm a continuation of the current overall uptrend. In that event, the major upside resistance target would be a re-test of the 139.20 uptrend high. In the event of a strong breakdown below the bottom of the current parallel uptrend channel, further key support immediately to the downside resides around the 131.00 support/resistance region.
James Chen, CMT
Chief Technical Strategist
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