Chart Of The Day: USD/JPY

7/18/2008 - USD/JPY - Price action on the USD/JPY 4-hour chart, as shown, has just hit significant resistance near the top of a short-term parallel downtrend channel (in red). This approach of resistance occurs after an impressive run-up from a key 38.2% Fibonacci retracement support level. Confirming a possible waning of upward momentum near resistance are oscillators like the displayed Stochastics, which are on the border of emerging down from overbought. In the event of a continued bounce down off resistance, the next support to the downside resides around the 105.50 region. Any true breakout above this resistance, on the other hand, would meet major additional resistance around the 108.50 region.

James Chen
Chief Technical Analyst

FX Solutions

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(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend lines in red; horizontal support/resistance lines in yellow; 200-period simple moving average in light blue.)