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USDJPY | Break Triangle Consolidation | March 15, 2011

(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.)

3/15/2011 – USD/JPY – Price action on USD/JPY (a daily chart of which is shown) as of Tuesday (3/15/2011) has dropped substantially to breakdown decisively below a triangle consolidation pattern that has been in place since the 80.20 area low, which represents the 15-year low that was hit on the last day of October 2010.

Price is currently very close to re-testing that extreme support level once again. Monday’s price action approached 80.20 before quickly correcting back up to the bottom of the triangle, but Tuesday morning’s price action is indicating that bearish momentum on the triangle breakdown indeed appears to be prevailing.

In the event of a breakdown below the noted 80.20 long-term low, price could target an immediate re-test of the 1995 all-time low of 79.75, followed by a further downside target in the 77.50 price region, which is around the 161.8% Fibonacci extension of the most recent major bullish run.

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