USD/JPY Confirms Double Bottom
03/10/2009 10:11 am EST
(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.)
After confirming a double-bottom reversal by breaking out above 94.60, USD/JPY (a daily chart of which is shown above) came just around 30 pips shy of the key 100.00 mark last week before retreating. This retreat took price all the way back down to a steep uptrend support line that began in mid-February, before bouncing back up again.
USD/JPY bullishness is likely not yet over. The steep uptrend support line should continue to serve as dynamic support for the pair, while the 100.00 region should continue to be the level to watch for any major breakout activity. A breakout above this level should confirm an uptrend continuation, and potentially target key resistance in the 102.50 price region.
By James Chen, Chief Technical Analyst, FX Solutions