(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.)
4/01/2009 – EUR/JPY – Price action on EUR/JPY, a daily chart of which is shown, retraced to a key uptrend support line earlier in the week, and has respected the trendline with a pronounced bullish bounce. This occurs after price hit a clear swing high in the uptrend, around the significant 134.00-134.50 support/resistance region. The current retracement back to the trendline could be considered a flag-like consolidation before a potential breakout to the upside. However, any continuation of the current uptrend would only be triggered on a substantial breakout above 134.50. If this occurs, the 137.00 price region should serve as a significant resistance target to the upside. To the downside, the noted uptrend support line should continue to serve as dynamic support going forward.
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