December 29 – USD/JPY Daily Chart
(Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend line in red; horizontal support/resistance line in yellow; Fibonacci retracements in grey; 50-period simple moving average in light blue.)
12/29/2008 – USD/JPY – Within the context of a continuing downtrend on the USD/JPY (a daily chart of which is shown), price action approaching the New Year has made a pullback retracement back up near a key downtrend resistance line (in red). This retracement reached a major support/resistance level around 91.00 (in yellow) before retreating, and now looks poised to continue its well-entrenched downtrend.
Of course, a downtrend continuation would not be confirmed unless a subsequent breakdown below the 87.00 level occurs, which represents the last swing low within the downtrend. Therefore, the 87.00 region signifies major support to the downside.
In the event of a strong break back up above the 91.00 region going into the New Year, which would also represent a break above the downtrend resistance line, price could target further major resistance in the 93.50 region.
Chief Technical Strategist, FX Solutions
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