(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; 50-period simple moving average in light blue.)
7/30/2009 – USD/JPY – Within the context of a significant parallel downtrend channel, price action on USD/JPY, a daily chart of which is shown, has formed a counter-trend support trendline. The parallel downtrend channel extends from the 4/6/2009 major high, and price is currently approaching the top border of this channel. Since this pair is currently entrenched within a clear downtrend, the event to watch for from a high-probability, trend-trading perspective, would be any breakdown of the counter-trend support uptrend line that extends from the 7/13/2009 low. In this event, a clear downside support target resides in the key 91.00 support/resistance price region. Any breakout above the parallel downtrend channel should meet immediate further resistance around the 97.00 level, and then further up at around the 99.70 price region.
James Chen, CMT
Chief Technical Strategist
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