Thursday September 4, 2008 - 17:24:16 GMT
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Chart of the Day - 9/04/2008 - USD/JPY
(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend lines in red; 50-period simple moving average in light blue.)
9/04/2008 â€“ USD/JPY â€“ Trend channels on the USD/JPY pair (a daily chart of which is shown) are rarely as accurately formed as on other currency pairs. But USD/JPY channels can still do an adequate job of outlining price action and representing relevant support and resistance levels. As we can see on the accompanying chart, before price broke out above the large, longer-term downtrend channel (represented by the parallel red lines) in June, a medium-term parallel uptrend channel (in green) had already been in the process of forming. This channel cannot yet be considered exceptionally strong, as it only has two touches on the bottom line thus far (although there are several touches on top). But currently, price is closely approaching the bottom of the channel once again. Oscillators like Stochastics, as shown, are supporting a possible turn at or near this uptrend support. If this turn occurs, the old support/resistance level of 108.50 should serve as immediate resistance to the upside, followed eventually by the 110.60 region. A strong breakdown and close below uptrend channel support (which would currently be around the 107.00 region), on the other hand, should target key support around the 105.50 area.
Chief Technical Analyst
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