(Chart courtesy of FX Solutions' FX AccuCharts. 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.)
7/14/2009 – EUR/JPY – Price action on EUR/JPY, a daily chart of which is shown, has consolidated, much like other yen crosses, in what is appearing to be an inverted pennant formation. This potential pennant, however, would only be confirmed as a continuation pattern if there is a significant breakdown to the downside of the pattern. In this event, a strong pattern breakdown could signify a definitive downtrend for the pair, especially if price goes on to reach the next major downside support target in the 126.00 price region. Current major resistance resides immediately to the upside in the 131.00 price region.
James Chen, CMT
Chief Technical Strategist
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