Potential Upside in USD/JPY
03/27/2009 10:32 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.)
Yen weakness this week has translated into a USD/JPY recovery that currently appears to be targeting a potential uptrend continuation. As shown on the USD/JPY daily chart, this continuation would not be confirmed without a clean break above 99.65 (the recent high in the current uptrend), and preferably above the key 100.00 psychological level.
Currently poking tentatively above a short-term downtrend resistance line extending from the 99.65 high, price is continuing to display a bullish bias.
If follow-through on this tentative trend line break occurs, and if price continues on to break above 100.00, the major upside resistance target resides around the 102.50 price region. To the downside, significant support can be found around 96.50.
By James Chen, Chief Technical Analyst, FX Solutions