Chart of the Day – USD/JPY
James Chen from FX Solutions at 01/11/10
1/11/2010 – USD/JPY – After having hit a 4-month high at the top of a medium-term downtrend channel extending from the April 2009 high, price action on USD/JPY (a daily chart of which is shown) has respected that downtrend resistance by tentatively retreating. This medium-term downtrend channel resides within a larger, long-term downtrend channel extending from the June 2007 high. Currently, a key bearish event to watch for would be a significant breakdown below the steep intra-channel uptrend support line (of the smaller channel) that represents the recent bullish price action from the bottom to the top of the smaller channel. A strong breakdown below this steep uptrend line could mean a downside continuation of the medium-term downtrend. In the event that price rises to re-test and breakout above the medium-term downtrend channel, the pair could subsequently reach up to target further resistance around the 96.00 price region and the top border of the larger channel.
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