(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; Fibonacci retracement levels in grey; 50-period simple moving average in light blue.)
After bouncing up off the key 96.00 support/resistance level early this week, price action on USD/JPY, a daily chart of which is shown, has reached all the way up to just a few pips shy of the targeted 100.00 level. This represents a critical juncture for this currency pair, as this level is not only a significant prior support/resistance level, but also a key psychological level.
Thursday (4/2) morning’s substantial bullishness in this currency pair was effectively stalled by the resistance imposed at this important level. Therefore, any significant break, close, and continuation above 100.00 should carry considerable bullish momentum, with a possible upside resistance target in the 103.00-103.50 zone, continuing the current overall uptrend.
To the downside, within the current consolidation, the 96.00 region should continue to serve as a support factor if 100.00 is ultimately respected.
By James Chen, Chief Technical Analyst, FX Solutions
