(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; downtrend line in red; 200-period simple moving average in light blue.)
8/11/2008 – EUR/JPY – Price action on the key EUR/JPY cross (a daily chart of which is shown), has performed a throwback to the downtrend line (represented by the long red line) that it broke in early June. This line was originally an exceptionally strong resistance level with at least six solid touches before breakout, and should therefore subsequently act as significant support going forward. The most recent bar has reached down and approached the line closely before bouncing right back up, as of this writing. Oscillators like the displayed Stochastics are also in oversold territory, although they have not yet begun to point up. In the event of a continuation of the current bounce up off support, the next resistance to the upside resides around the 166.00 region.
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