Chart of the Day
USD/JPY Daily Chart — October 23, 2009
By
James Chen
, Published:
10/23/2009
(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.)
10/23/2009 – USD/JPY – Bullish price action for the last two weeks on USD/JPY, a daily chart of which is shown, has formed a steep short-term uptrend within the context of a longer-term downtrend channel. Price has also just reached strong resistance in the 92.00 support/resistance region, and additionally, is approaching the approximate upper resistance border of the rough parallel downtrend channel. Momentum indications are showing signs that price on this currency pair may be close to overbought. If there is indeed an impending exhaustion of the current bullishness within the context of the overall downtrend, a clear bearish trigger would be a strong breakdown below the short-term uptrend line. In this event, major downside support targets reside around 88.00, which represents the last major swing low earlier this month, and 87.00, which represents the double-tested low at the end of 2008 and beginning of 2009. On any bullish breakout above the current parallel downtrend channel, the 94.00 price region serves as a further key resistance target to the upside.
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James Chen, CMT
Chief Technical Strategist,
FX Solutions
Chief Technical Strategist,
FX Solutions
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