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Trading Ideas for USD/JPY Currency Pair
10/08/2008 12:01 pm EST
(Price on 1st pane, Slow Stochastics on 2nd pane; uptrend line in green; horizontal support/resistance levels in yellow; Fibonacci Retracements in grey; 50-period simple moving average in light blue.)
It is no secret that the yen has strengthened dramatically in the last few days, as shown on the accompanying USD/JPY daily chart. After retreating from a significant downtrend resistance line (marked “A”), price has dropped all the way back down slightly below the support offered by the long-term downtrend line (marked “B”), which originally served as resistance before a breakout occurred in June.
In the process, the pair has tentatively broken down below the key 100.00 level (marked “C”), and reached all the way down to the 98.50 support level (marked “D”) before bouncing back up again.
Any further bearish price action below this 98.50 level should eventually target the key 95.75 support level (marked “E”). In the event of a significant upward correction, on the other hand, the key 102.50 region should serve as strong resistance to the upside.
By James Chen, Chief Technical Analyst, FX Solutions
*IMPORTANT NOTICE: These comments are for information purposes only. The information contained on this document does not constitute a solicitation to buy or sell by FX Solutions, LLC., and/or its affiliates, and is not to be available to individuals in a jurisdiction where such availability would be contrary to local regulation or law. Opinions, market data, and recommendations are subject to change at any time. Forex trading involves substantial risk of loss and is not suitable for all investors.
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