(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; chart patterns in white; 50-period simple moving average in light blue.)
8/17/2010 – USD/JPY – Price action on USD/JPY (a 4-hour chart of which is shown) as of Tuesday (8/17/2010) has generally consolidated in a range between the 86.50 resistance region and the 85.00 support region for the last two weeks. This consolidation occurs within the context of a steep and reliable downtrend resistance line extending from the June high. The most recent bounce off this downtrend line, which coincided with a bounce down off the 86.50 range resistance, occurred just late last week, once again confirming the downtrend. In the event of a breakdown below 85.00 range support and then the long-term 84.70 low, the 83.50 price region would be a viable technical target as it is a 138.2% Fibonacci extension of the last major bearish run. Upside resistance continues to reside around the noted downtrend resistance line, followed by the 86.50 range resistance. Any breakout above that level could confirm a possible trend change with a potential upside resistance target in the key 88.00 price region.
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