[Please click on the accompanying chart to enlarge.] Depending upon how you draw the long-term downtrend line on the USD/JPY daily chart, as shown, today’s price bar has appeared to have reached down and bounced off the line after having broken down below the short-term uptrend line on Friday and Sunday. This bounce off the long-term line coincides with the Stochastics turning up from overbought. Therefore, there is oscillator confirmation of this turn up and possible bullish bias. In the event of continued momentum to the upside, 108.50 represents a major resistance region to the upside.
- James
James Chen is the Chief Technical Analyst at FX Solutions,
a leading Forex broker. He is also a registered Commodity Trading
Advisor (CTA) and a Chartered Market Technician (CMT) Level 3
candidate. At FX Solutions, Mr. Chen writes daily currency analysis,
conducts forex trading seminars, and has authored numerous articles on
currency trading and technical analysis for major financial
publications. His upcoming book, Essentials of Foreign Exchange Trading
(John Wiley & Sons), will be released in early 2009.
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