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(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; 50-period simple moving average in light blue.)
Price action on USD/JPY, a four-hour chart of which is shown, has reached up to bounce down off of a significant support/resistance level in the 97.15 price region.
This level corresponds approximately with the key 50% Fibonacci retracement level of the recent descent from 98.56 to 95.50. Continued bearishness in this pair should easily target the uptrend support line extending from the lows in late May.
Directly below this trend line is strong support in the 95.50 price region, any breakdown of which should target further support around 94.50. Immediate upside resistance continues to reside in the 97.15 support/resistance region.
By James Chen, Chief Technical Analyst, FX Solutions
